Asia’s very low sulphur fuel oil (VLSFO) market inched higher on Monday on the back of growing demand for high-speed sailing as vessels shun the Red Sea route for trade due to shipping attacks and opt for longer routes, analysts and traders said.

Cash premium for VLSFO rose by about 8 cents to $10.83 per metric ton on Monday.

Analysts at consultancy Energy Aspects said in a monthly note that there could be an upside for second-quarter VLSFO structure, cracks and east-west differentials as bunker demand rises due to rising sailing speeds and low sulphur vacuum gas oil demand from FCC builds ahead of summer.

“However, incremental supplies will keep a lid on low-sulphur strength. The start-up of the Dangote refinery will introduce some 85,000 barrel per day of low-sulphur straight-run material across the second and third quarter, barring slippage of start-up schedules, along with higher VLSFO exports from Al-Zour,” they added.

NEWS

– Russia’s energy infrastructure has been hit by drone attacks and fires in the past month, adding to uncertainty in global oil and gas markets already rocked by the conflict in the Middle East.

– Oil prices dipped on Monday as China’s ailing property sector took another hit while a drone attack on U.S. forces in Jordan added to supply disruption concerns in the Middle East and Houthi militants stepped up attacks on vessels in the Red Sea.

SINGAPORE CASH DEALS

No trade.
Source: Reuters (Reporting by Mohi Narayan; Editing by Shweta Agarwal)