Asia's fuel oil markets weakened further on Thursday, led by bearish upstream sentiment across the broader barrel after the U.S. and Iran concluded talks in Doha, Qatar.

The market structure for 380-cst high sulphur fuel oil (HSFO) sank into a deeper contango at the prompt months, data from market sources showed. Spot differentials also held steadily discounted after flipping negative in the previous session.

Singapore residual fuel inventories fell this week, though stockpiles were broadly back at more typical level

The very low sulphur fuel oil (VLSFO) market also fell on Thursday, though it retained a stronger floor than HSFO..

India's BPCL offered a HSFO cargo for loading in July via a tender that closes on Friday, based on market sources.

Cracks rebounded after declining the previous session. VLSFO (LFO05SGBRTCMc1) rose to a premium near $13.35 a barrel, while 380-cst HSFO crack (FO380BRTCKMc1) narrowed to a discount of about $6.90 a barrel, LSEG data showed.

INVENTORY DATA

- Singapore's residual fuel stockpiles (STKRS-SIN) fell 3.2 to 19.65 million barrels (3.1 million tons) in the week to July 1, based on Enterprise Singapore data.

OTHER NEWS

- Oil prices fell for a third consecutive day on Thursday as concerns over supply disruptions eased after Qatar said Iran and the U.S. had made progress in talks over the Strait of Hormuz.

- U.S. crude stocks fell to their lowest last week since 2018 as domestic refinery demand rose, while gasoline inventories also fell ahead of the July 4 holiday weekend, the Energy Information Administration said on Wednesday.

- China's Hengli Petrochemical, sanctioned by the U.S. for allegedly buying Iranian oil, has cancelled recent purchases of non-Iranian crude, five trade sources said, forcing the firm to cut refinery operations further as inventory runs low.

- Kuwait Petroleum Corporation is asking some global funds bidding for a $7 billion stake in its oil pipeline network to recruit other investors to help consolidate the string of firms that lodged bids, three sources familiar with the matter told Reuters.

WINDOW TRADES

- 180-cst HSFO: No trade.

- 380-cst HSFO: One trade.

- 0.5% VLSFO: No trade.

ASSESSMENTS

FUEL OIL

CASH ($/T)

ASIA CLOSE

CHANGE

PREV CLOSE

RIC

Cargo - 180cst

428.77

1.47

427.30

(FO180-SIN)

Diff - 180cst

2.19

-2.38

4.57

(FO180-SIN-DIF)

Cargo - 380cst

406.40

-4.94

411.34

(FO380-SIN)

Diff - 380cst

-1.69

-1.13

-0.56

(FO380-SIN-DIF)

Cargo - 0.5% VLSFO

571.25

-5.37

576.61

(MFO05-SIN)

Diff - 0.5% VLSFO

18.98

-0.40

19.39

(MFO05-SIN-DIF)

For a list of derivatives prices, please refer to ENSWAP/INFO or the RICs below:

180cst M1

(FO180SGSWMc1)

180cst M1/M2

(FO180SGSDMc1)

380cst M1

(FO380SGSWMc1)

380cst M1/M2

(FO380SGSDMc1)

0.5% VLSFO M1

(LFO05FSGMc1)

0.5% VLSFO M1/M2

(LFO05FSGSMc1)

Cracks 180cst-Brent M1

(FO180BRTCKMc1)

Cracks 180cst-Dubai M1

(FO180SGCKMc1)

Cracks 380cst-Brent M1

(FO380BRTCKMc1)

Cracks 380cst-Dubai M1

(FO380DUBCKMc1)

Cracks 0.5% VLSFO-Brent M1

(LFO05SGBRTCMc1)

Cracks 0.5% VLSFO-Dubai M1

(LFO05SGDUBCMc1)

Visco 180cst/380cst M1

(FOVISSGDFMc1)

Hi-5 0.5% VLSFO/380cst M1

(FO05-380SGMc1)

GoFo 10PPM/0.5% VLSFO M1

(GO10FO05FSGMc1)

East-West M1

(FOSGEWMc1)

Barges M1

(HFOFARAAMc1)

Barges M1/M2

(HFOFARAASMc1)

Crack Barges-Brent M1

(HFOFARAACMc1)