Fuel Oil Market Sees Mild Decline Amid Stable Shipping Demand and Supply Pressures

Key Highlights

• Domestic Prices: Virgin 180cST Furnace Oil in Mumbai at ₹47.5/kg; Mundra at ₹48.5/kg.
• East China: 180cST average price dipped 0.45% to $751/ton; 120cST priced at $774/ton.
• Inventory Trends: Fuel oil stocks up to 24.126 million barrels in Singapore; middle distillates at 9-month low.
• Market Outlook: Sentiment cautious, with buyers opting for essential fueling amid uncertain crude dynamics.

Furnace Oil Prices in India Hold Steady Amid Global Volatility

• As of April 28, 2025, the price of Virgin 180cST Furnace Oil in Mumbai is ₹47.5 per kg, while in Mundra, it is slightly higher at ₹48.5 per kg. 
• The regular 180cST Furnace Oil grade in Mumbai is priced at ₹49 per kg. Meanwhile, the Low Sulphur Heavy Stock (LSHS) grade available in Jamnagar is priced at ₹56.5 per kg. All products are offered in bulk packaging.
• The 180CST fuel oil market in East China recorded a slight decline over the past week.
  Average domestic price of 180CST fuel oil: 751 USD/ton, marking a 0.45% decrease from 754 USD/ton from the start of the week. In the Dalian region, the self-pickup low sulfur price for:
  A. 180CST fuel oil was 760 USD/ton.
  B. 120CST fuel oil was 774 USD/ton.

Internationally, the Singapore Enterprise Development Board (ESG) reported:

• Fuel oil inventories rose by 1.239 million barrels to reach 24.126 million barrels (an 18-week high).
• Middle distillate inventories decreased by 1.138 million barrels to a 9-month low of 8.576 million barrels.
• Light distillate inventories rose by 1.128 million barrels to 15.62 million barrels (a two-week high).

China’s Fuel Oil Market Sees Slight Price Correction

• Blended raw materials used in ship fuel witnessed a price drop last week, offering limited support to the domestic ship fuel market. Crude oil markets overall softened, partly due to:

1. OPEC+ considering increasing production in June.
2. Kazakhstan indicates difficulties in adhering to the production cut agreement.
3. Easing geopolitical tensions, which exerted additional downward pressure on oil prices globally.

• The downstream shipping sector showed stable coastal bulk freight rates, indicating no significant surge in terminal demand.
• Ship owners predominantly placed small-sized refueling orders driven by immediate operational needs rather than strategic stocking.
• Transaction volume in the shipping market remained moderate, focused primarily on essential fueling rather than speculative or bulk buying.
• Despite the slight crude oil price rise recently, overall sentiment in the domestic marine fuel market stayed cautious, reflecting a wait-and-watch approach among buyers.

Oil Market News: Inventory Fluctuations Reflect Divergent Demand Trends Globally

• The global energy sector is currently focused on Namibia, where increasing pressure is mounting for the government and oil companies to ensure fiscal stability and fast-track recent oil discoveries to reach Final Investment Decisions (FID). This push comes at a time when energy markets worldwide are grappling with uncertainty and volatility.
• Despite a broader downturn in oil prices, Uzbekistan's energy sector demonstrated resilience in the first quarter of 2025, recording significant increases in coal, gasoline, diesel fuel, and natural gas production. However, not all regions have been able to escape the slowdown. Crude oil deliveries to Türkiye’s STAR refinery, owned by Azerbaijan’s SOCAR, fell to 830,884 tons in February, highlighting a dip in refinery throughput amid fluctuating crude markets.
• Meanwhile, China’s crude oil storage levels surged in March, reversing the earlier trend of inventory draws. Despite processing the highest volume of crude oil in a year, Chinese refineries still saw stockpiles rise to near three-year highs, reflecting cautious sentiment around future demand and global price movements.
• Adding to market pressures, oil prices have continued to decline, weighed down by escalating tariffs and tensions within OPEC+, particularly impacting Saudi Arabia’s ambitious “giga-projects” designed to diversify its economy away from hydrocarbons. The risks posed by falling oil revenues have created renewed urgency for resource-rich countries to adapt to shifting global dynamics.
• In Iraq, government directives to bolster gas storage capacities ahead of the summer months underscore how Middle Eastern nations are preparing for possible supply disruptions and seasonal demand spikes.
• Looking longer-term, OPEC has emphasized the need for substantial investments, projecting that the oil and gas sector will require around $17.4 trillion by 2050 to meet growing global energy demands and add sufficient production capacity.
• Oil markets remained under pressure over the past weeks, largely due to fears of a brewing US-China trade war and surprise decisions by OPEC+ members to increase output. Although prices have been largely range-bound — consolidating between $60 and $65 per barrel — trading volumes suggest potential bullish momentum building beneath the surface.
• Political developments have also played a role in shaping market sentiment. In the United States, President Donald Trump's pursuit of cheaper crude prices has tested the strategic planning of major oil companies, forcing them to rethink investment and growth strategies amid a lower-price environment.
• Nonetheless, some signs of cautious optimism emerged early this week, with crude prices managing modest gains. ICE Brent crude edged above $67 per barrel, supported by tentative buying interest as markets await further clarity on geopolitical and trade-related developments.

Expert Opinion: Consolidative Sentiment Expected in Marine Fuel Market

• Looking ahead, the 180CST fuel oil market in East China is expected to maintain a consolidating trend in the near term. 
• Price movements will likely remain range-bound, influenced by crude oil price fluctuations, OPEC+ policy updates, and cautious buying behavior from the shipping sector.