Refining crack spreads for fuel oil fell on Monday after trading participants engaged in a wave of selling activity, based on market sources and pricing data.

Singapore’s January crack spread for very low sulphur fuel oil (VLSFO) dived below premiums of $10 per barrel on Monday, as of the Asia close (0830 GMT), hitting more than five-month lows, showed LSEG data.

The derivatives market has weakened in recent sessions, with selloffs persisting, while heavy supplies weighed on the broader market.

High sulphur fuel oil (HSFO) margins also softened, with 380-cst HSFO cracks sliding toward discounts of $6 per barrel on Monday.

Meanwhile, the spot market retained downward pressure, with HSFO trading at softer cash premiums to cargo quotes, extending their recent slide. Front-month backwardation narrowed for HSFO and VLSFO.

REFINERY UPDATES

– U.S. oil refiners are expected to have about 89,000 barrels per day of capacity offline in the week ending Dec. 6, raising available refining capacity by 85,000 bpd, research company IIR Energy said.

OTHER NEWS

– Oil prices climbed on Monday after the fall of Syrian President Bashar al-Assad’s regime introduced greater uncertainty to the Middle East, although the gains were capped by a waning demand outlook for the coming year.

– Saudi Aramco has cut its January 2025 official selling prices for Asian buyers to the lowest level since early 2021, it said on Sunday, as weak demand from top importer China weighs on the market.

– India’s fuel consumption in November rose by 9.3% year-on-year to 20.43 million metric tons, reaching its highest level since May, oil ministry data showed.

– Chevron, the only U.S. oil producer now working in Venezuela’s oilfields, has not held any discussions with President-elect Donald Trump’s team over the company’s operations in the country, CEO Michael Wirth said.

WINDOW TRADES

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