Asia’s spot market for high sulphur fuel oil (HSFO) firmed on Wednesday, a day after Saudi Arabia and Russia said they would extend voluntary oil cuts to the end of the year.

Saudi Arabia’s crude supply cuts usually have a bullish impact on the HSFO market as the cuts are typically on heavy crude grades that produce more fuel oil in refining.

The 380-cst HSFO cash differential rose to a premium of $9.25 a metric ton, while October crack firmed to a discount of $9.23 a barrel.

Meanwhile, very low sulphur fuel oil (VLSFO) also rebounded amid firmer biding, though the risk of downside remains on expectations of higher supplies.

The Singapore 0.5% VLSFO cash differential climbed to a premium of $4.09 a metric ton, while the October crack spread held steady LFO05SGDUBCMc1 to a premium of $7.42 a barrel.

OTHER NEWS

– Oil prices reversed course on Wednesday after rising more than 1% in the previous session on a firmer dollar and as investors shrugged off jitters arising from supply cuts from Saudi Arabia and Russia.

– Saudi Arabia and Russia on Tuesday said they would extend voluntary oil cuts to the end of the year, despite a rally in the oil market and analyst expectations of tight supply in the fourth quarter.

– The G7 and allies have shelved regular reviews of the Russian oil price cap scheme, people familiar with the matter told Reuters, even though most Russian crude is trading above the limit because of a rally in global crude prices.

– Asian buyers will quickly absorb a surge in supplies of liquefied natural gas coming to market over the next five years, an executive with Vitol, the world’s largest independent oil trader, said on Wednesday.

WINDOW TRADES

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