The premium for very-low sulphur fuel oil (VLSFO) over high-sulphur fuel oil (HSFO) has declined to its lowest since October 2021, data showed Tuesday.

The premium, also known as the Hi-5 spread, slipped to $102.50 a metric ton FO05-380SGMc1 for August at the Asia close (0830 GMT) on Tuesday, Refinitiv data showed.

The narrowing spread emerged as Asia’s VLSFO market has compe under further pressure amid multiple offers and selling interest for cargoes loading in July and early August.

Cash differential for 0.5% VLSFO MFO05-SIN-DIF slipped to a premium of $11.80 a metric ton, while front-month crack LFO05SGDUBCMc1 fell to a premium of $9.57 a barrel.

In contrast, the high-sulphur fuel oil (HSFO) market has strengthened.

Cash differential for 380-cst HSFO FO380-SIN-DIF climbed to a premium of $5.52 a ton on Tuesday, while the product’s crack FO380DUBCKMc1 firmed to a discount of $6.57 a barrel.

OTHER NEWS

– Oil prices rose on Tuesday as markets weighed supply cuts for August by top exporters Saudi Arabia and Russia against the backdrop of an uncertain global economic outlook.

– Uganda is seeking new funding for its planned crude oil refinery, after negotiations with a consortium that included a unit of U.S. firm General Electric lapsed over its failure to mobilise financing in time.

– Japan’s leading shipping company NYK has signed a 5-year contract with the Global Centre for Maritime Decarbonisation to collaborate on low-carbon solutions for shipping.

– Power supply is returning in Kazakhstan after a significant outage affected an oil refinery, major oilfields and the CPC export pipeline, the Central Asian nation’s energy ministry said.

WINDOW TRADES O/AS

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Louise Heavens)