Asia’s very low sulphur fuel oil (VLSFO) market pared gains as of Friday, dragged by slow demand for marine fuel, while bunker premiums remained under pressure, trade sources said.

The cargo premium for VLSFO had rebounded this week, buoyed by stronger bids by a couple of market participants, though the market was still fundamentally soft.

Bunker premiums for VLSFO were lagging the recovery in cargo premiums, sources said, as demand showed little improvement.

Premiums of VLSFO delivered for bunkering at Singapore traded below $10 a metric ton, largely stagnant from last week, according to sources.

Meanwhile, VLSFO cargo premiums retreated on Friday as offers softened, though cracks logged a weekly increase of more than 10%, closing at a premium between $10 to $10.50 a barrel, showed LSEG data at 0830 GMT.

On the high-sulphur front, spot premiums were little changed on Friday, while 380-cst margins FO380DUBCKMc1 closed at discounts of about $6 a barrel.

INVENTORY DATA

– ARA inventories STK-FO-ARA rose 1.3% to 1.53 million tons in the week to June 27, data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices rose on Friday and were on course for a third straight weekly jump, buoyed by growing expectations that the U.S. Federal Reserve will soon start cutting interest rates and U.S. inflation data due later in the day.

– The U.S. Senate budget committee launched a probe of domestic oil producers about any efforts to illegally coordinate oil prices with the Organization of the Petroleum Exporting Countries, in the latest effort by Democratic lawmakers to pressure energy companies.

– Top oil exporter Saudi Arabia may cut prices for crude grades it sells to Asia for a second month in August, tracking weakness in Middle East benchmark Dubai, trade sources said on Friday.

– Commodity markets face greater fragmentation and supply disruptions if former U.S. president Donald Trump wins the Nov. 5 election to return for a second term, an HSBC economist said on Friday.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh)