Spot premium for very low sulphur fuel oil (VLSFO) extended its uptrend on Tuesday as bids remained strong, while backwardation at the prompt months also continued to widen.

The premium was pegged at $18.80 per metric ton to Singapore quotes, holding onto more than nine-month highs.

Meanwhile, backwardation for the balance-September and October contract widened beyond $23 per ton, also hitting levels last seen in late November 2023.

The high sulphur fuel oil (HSFO) market also received a boost amid VLSFO’s rally, with cash premium for the 380-cst grade surpassing $12 per ton on Tuesday.

Supply tightness for prompt loadings and deliveries have bolstered the market to its recent highs, according to trade sources.

OTHER NEWS

– Brent oil prices declined on Tuesday as sluggish economic growth in China, the world’s biggest crude importer, increased demand concerns while a halt to Libyan production and exports provided a floor.

– OPEC oil output fell in August to its lowest since January, a Reuters survey found, as unrest that disrupted Libyan supply added to the impact of ongoing voluntary supply cuts by other members and the wider OPEC+ alliance.

– Freight rates to ship Russia’s Urals crude to India have fallen further and remain at their lowest since Western countries introduced a price cap late in 2022, boosting the economics of Moscow’s oil exports, industry sources told Reuters.

– Nigeria’s Dangote Oil Refinery has begun processing gasoline after delays caused by recent crude shortages, an executive said.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters