Asia’s very low sulphur fuel oil (VLSFO) market softened on Thursday, with the supply outlook remaining ample into the next quarter, industry sources said.

Nigeria’s Dangote refinery is offering more low-sulphur straight run fuel amid a persistent stream of tenders recently.

The cargo of 130,000 tons is set to load from Lekki between October 6 and October 8, with the latest tender closing on Friday, according to sources.

Meanwhile, offers for VLSFO sank back into discounts for prompt loading dates, weighing on the cash differential. In contrast, stronger cargo bids for high sulphur fuel oil (HSFO) emerged on the window, lifting its differential higher.

India’s HPCL offered two HSFO cargoes for loading from Vizag in October, via a tender that closes on September 19.

Overall supply should remain plentiful, with onshore residual inventories still hovering well above average levels.

INVENTORY DATA

Singapore residual fuel inventories (STKRS-SIN) fell 4.2% to 25.4 million barrels (4 million metric tons) in the week to Sept. 17, according to Enterprise Singapore data.

OTHER NEWS

– Oil prices edged lower on Thursday after the Federal Reserve cut interest rates as traders weighed the start of looser monetary policy against concerns about the U.S. economy.
– Freight rates for Very Large Crude Carriers soared to their highest in more than two years, according to industry sources and data compiled by LSEG, as tanker supply tightens with a rise in Middle East exports and more arbitrage supplies to Asia.
– China’s exports of refined oil products in August rose 8.5% year-on-year, according to customs data, but slowed from July when it recorded the highest monthly total since June 2024.

– Global commodities traders Vitol and Glencore are expected to make formal bids for Chevron’s 50% stake in Singapore’s second-largest refinery, five people familiar with the matter said.

WINDOW TRADES

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