The spot cash differential for 180-cst high sulphur fuel oil (HSFO) flipped into a premium on Monday as the supply pool for viscosity cutter stocks tightened recently, trade sources said.

Asia’s spot 180-cst HSFO cash differential (FO180-SIN-DIF) climbed for a seventh consecutive session to a premium of 96 cents a tonne on Monday, after hovering in discounted territory since end-December last year.

Viscosity cutter stocks, which are used to blend high-viscosity material into bunker fuels, have tightened for the fuel oil pool as refining incentive shifted towards other distillate products amid lower margins for fuel oil.

The front-month viscosity spread (FOVISSGDFMc1), which is the difference between 180-cst HSFO and 380-cst HSFO, widened to $19 a tonne at the Asia close (0830 GMT), a one-month high.

For very low-sulphur fuel oil (VLSFO), cash differentials were range-bound in premiums of the low $10s over Singapore quotes. The 0.5% VLSFO (MFO05-SIN-DIF) cash differential stood at $11.50 a tonne on Monday.

WINDOW TRADES

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