Asia’s very low sulphur fuel oil (VLSFO) market weakened further on Monday, while China has issued an additional 3 million metric tons of fuel oil import quotas in 2023 for non-state firms.

The additional quota takes the total for 2023 to 19.2 million tons, following the 16.2 million tons in non-state fuel oil import quotas issued at the start of the year.

Meanwhile, fuel oil price benchmarks have started easing since the previous week.

Singapore’s 0.5% VLSFO cash premium MFO05-SIN-DIF fell below $17 a metric ton on Monday, declining by nearly 25% from its last session. Refining crack for VLSFO LFO05SGDUBCMc1 fell to a premium of $10.90 a barrel.

For high sulphur fuel oil (HSFO), cash differentials for the 380-cst grade FO380-SIN-DIF held steady amid thin trade, while margins FO380DUBCKMc1 rose to a discount of $11.86 a barrel.

In tenders, Indian Oil offered HSFO for loading from Vizag in mid-December, market sources said.

OTHER NEWS

– Oil slipped on Monday as investors waited for an OPEC+ meeting later this week for an agreement expected to curb supplies into 2024.

– Sri Lanka will likely approve a proposal on Monday from Chinese state refiner Sinopec to build a $4.5-billion-dollar refinery, the South Asian island nation’s energy minister said on Saturday

– South Korea’s SK Energy, owned by SK Innovation, is likely to bring back online one of its crude distillation units by mid-December after shutting it for repairs last week, three sources familiar with the matter said on Monday.

– The Panama Canal, one of the world’s main maritime trade routes, announced on Friday it is launching a special auction slot on Saturday, as it battles a severe drought that has forced it to reduce daily ship crossings.

WINDOW TRADES O/AS

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