Asia’s very low sulphur fuel oil (VLSFO) cash premium rose to its highest so far this year, extending its climb for a sixth straight session while market backwardation held its strength.

The Singapore 0.5% VLSFO cash premium MFO05-SIN-DIF was pegged at $29 a metric ton on Friday, while margin LFO05SGDUBCMc1 closed at a premium of $10.61 a barrel.

Market backwardation widened day-on-day, with the balance-month/Dec timespread at $31 a ton on Friday, compared with $29.75 a ton on Thursday.

Strong cargo bids continued to keep the market buoyed, on top of expectations for tight prompt supplies into November.

Meanwhile, the high sulphur fuel oil (HSFO) market also gained some strength this week due to the VLSFO rally.

Cash differential for 380-cst HSFO FO380-SIN-DIF inched higher to a premium of 75 cents a ton on Friday, while margin FO380DUBCKMc1 closed at a discount of $14.59 a barrel.

In tenders, Malaysia’s RAPID recently sold a cargo of 300,000 barrels for loading in early December, trade sources said.

ARA INVENTORIES
Inventories at ARA STK-FO-ARA climbed 13.7% week-on-week to 1.45 million tons in the week to Nov. 2, data from Dutch consultancy Insights Global showed.

OTHER NEWS
– Oil prices were little changed on Friday, but headed for a second week of losses as supply concerns driven by conflict in the Middle East eased, while the demand outlook from the world’s top crude importer China remained uncertain.

– Oil traders will pay premiums for the annual supply of most grades of Middle East crude in 2024, trade sources said, on concerns over supply from the region after the Israel-Gaza conflict heightened geopolitical tensions.

– PetroChina is proposing to buy up to 8 million barrels a month of Venezuelan crude from state-run oil company PDVSA, according to four people familiar with the matter, hoping to resume a trade suspended four years ago by U.S. sanctions.

– Nigeria’s state oil firm NNPC will supply the new 650,000 barrel-per-day Dangote oil refinery with up to six cargoes of crude oil in December to be used in test runs, three industry sources with knowledge of the matter said.

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 Varun H K)