Asia’s fuel oil benchmarks continued to soften on Tuesday amid high supply inflows in the month, with some cargo arrivals for November spilling into December, based on ship-tracking data.

The cash premium for very low sulphur fuel oil (VLSFO) remained capped under $3 a metric ton to cargo quotes, though backwardation widened slightly on Tuesday after multiple sessions of narrowing.

Meanwhile, high-sulphur fuel oil (HSFO) continued to show signs of weakening. Refining margins for 380-cst HSFO slumped day-on-day towards discounts of $4.50 a barrel, based on LSEG data at Asia close (0830 GMT).

Hi-5 spreads continued to recover amid softer HSFO benchmarks. Balance-month December hi-5 closed at about $95 a ton, while January hi-5 closed at about $99, LSEG data showed.

REFINERY UPDATES

– Russia plans to take 1.1 million metric tons of refining capacity offline in December, up more than 60% from a previous estimate but still less than half the 2.4 million tons in November, according to Reuters calculations based on data from industry sources.

– Iraq on Saturday halted all operations at the Shuaiba refinery in Basra following the overloading of fuel oil storage tanks, according to three refinery officials.

OTHER NEWS

– Oil prices nudged higher on Tuesday but remained within a narrow trading range as traders awaited the outcome of an OPEC+ meeting later this week.

– OPEC+ is likely at its meeting on Thursday to extend its latest round of oil output cuts until the end of the first quarter, four OPEC+ sources told Reuters, to provide additional support for the oil market.

– China is introducing new rules from January for lowering costs of transporting oil products by pipeline, state planner National Development and Reform Commission said on Tuesday.

– India has scrapped a windfall tax on crude products, aviation turbine fuel, and petrol and diesel exports, a government order said.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Tasim Zahid)