Asia spot differentials for high sulphur fuel oil (HSFO) remained in discounts on Monday, though they narrowed from the last session as the market structure recovered slightly.

A stronger trade emerged for 380-cst HSFO in the spot market. Meanwhile, the prompt intermonth spread for 380-cst HSFO flipped back into a small backwardation, after weakening sharply into contango last week.

Trading momentum was slower in the derivatives market due to a holiday in China and London, market sources said. Nonetheless, HSFO cracks for June maintained their recent strength in premiums over crude futures.

In the very low sulphur fuel oil (VLSFO) market, cash premiums also edged higher on firmer bids and trades in recent sessions, while prompt cracks (LFO05SGBRTCMc1) breached premiums of $11 a barrel on Monday after crude prices tumbled.

As for spot tenders, Indonesia’s Pertamina offered residual fuels for loading in June. These included two cargoes of low-sulphur waxy residue and one cargo of marine fuel oil.

OTHER NEWS

– Oil prices fell more than 1% on Monday after OPEC+ decided over the weekend to further speed up oil output hikes, spurring concerns about more supply coming into a market clouded by an uncertain demand outlook.
– A vessel chartered by Chevron carrying some 300,000 barrels of Venezuelan oil was set to start discharging at a Venezuelan port on Thursday, according to shipping data and a source.
– Goldman Sachs reduced its oil price forecast following decisions by the OPEC+ to accelerate oil output increases, the bank said in a note.
– U.S. President Donald Trump’s administration on Friday proposed cutting billions of dollars in federal funding next year for projects including renewable energy and electric vehicle chargers, and gutting programs aimed at curbing climate change.

WINDOW TRADES

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