Asia’s market for very low sulphur fuel oil (VLSFO) logged a weekly climb, while downstream bunker premiums received an uplift after being trapped in a tight range for over four months.

Singapore premiums for delivered VLSFO bunker fuel breached $16 per metric ton this week, with support coming from tighter supply for prompt delivery dates, according to trade sources.

The premiums have been capped at levels near $10 per ton since mid-March amid lukewarm demand and ample supply.

Meanwhile, refining margins for fuel oil also edged higher from the previous week.

VLSFO cracks for August closed at premiums of around $11.70 per barrel on Friday, up more than 10% week-on-week, based on LSEG’s data.

High sulphur fuel oil margins also retained strength, with 380-cst cracks closing at discounts of about $4.70 per barrel, climbing more than 15% from last week.

As for tenders, Taiwan’s Formosa offered 40,000 metric tons of main column bottoms, scheduled to load from Mailiao port between Aug. 17-19, sources said. The tender closes on Friday.

INVENTORY DATA
– ARA inventories were at 1.42 million tons in the week to July 25, largely stable from last week, data from Dutch consultancy Insights Global showed.

OTHER NEWS
– Oil prices remained on track for a third straight week of declines due to weak demand in China, the world’s largest crude importer, and expectations of a ceasefire deal for the Gaza war and related violence in the Middle East.

– Imports of Iranian crude have been flowing into the port and refining city of Dalian since late last year, tanker tracking firms and trading sources said, helping sustain the country’s purchases of the oil at near record levels.
– Russia’s offline primary oil refining capacity has been revised up by 42% for July from the previous plan to 2.5 million metric tons, which is about 9.2% of the total capacity of Russia’s primary refining units, according to Reuters calculations based on data from industry sources.
– Differentials for U.S. sour crude Mars have been in a steep decline this month and hit their widest discount to benchmark crude futures since October this week, according to data from brokers, as refiners faced slimmer profit margins due to weak demand.

WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala)