Asia’s hi-5 fuel oil spread narrowed further on Wednesday as the very low sulphur fuel oil (VLSFO) held onto a bearish tone.

The hi-5, which reflects the premium of VLSFO over 380-cst HSFO, closed at about $72 a metric ton, based on LSEG data.

The spread has shown signs of narrowing in recent sessions as VLSFO remained under pressure in oversupply.

Meanwhile, cracks also traded lower on Wednesday.

October crack for VLSFO softened day-on-day to a premium below $7 a barrel, while 380-cst HSFO crack eased to a discount near $4.50 a barrel.

OTHER NEWS

– Oil prices rose on Wednesday after Israel attacked Hamas leadership in Qatar, Poland shot down drones and the U.S. made a push for new sanctions on buyers of Russian oil, but concerns over crude oversupply capped further gains.
– Chevron plans to increase oil production in Argentina’s Vaca Muerta shale formation to 30,000 barrels per day by the end of the year, the company’s Argentina country manager Ana Moneto said.

– U.S. tariffs are increasingly pressuring the already challenged petrochemicals sector, with China, the top producer, shifting its exports to Asia, industry executives said at a conference in Singapore.
– U.S. lawmakers from states with oil refineries, led by Republican Senator Mike Lee of Utah, will introduce legislation on Tuesday to block President Donald Trump from shifting renewable fuel blending obligations from small refineries to larger ones, according to draft legislation seen by Reuters.

WINDOW TRADES

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