Asia’s very low sulphur fuel oil (VLSFO) margin fell on Tuesday, trending in line with a recent decline in gasoline cracks.
The October crack for 0.5% VLSFO closed lower at a premium of $7.89 a barrel at the Asia close, down for a second straight session.
Asia’s gasoline refining margins haven fallen sharply, mirroring weakness in global markets and weighed by fears that high pump prices could dent fuel demand across major markets.
This could pressurise the VLSFO market further, with more blending components potentially directed towards the fuel oil blending pool.
“Singapore gasoline cracks settled in single-digit territory on Friday, suggesting that there may soon be more LSVGO and LSSR available for the bunker pool,” said FGE in a note on Tuesday.
Meanwhile, October crack for 380-cst high sulphur fuel oil (HSFO) also fell, closing at a discount of $11.91 a barrel on Tuesday.
PAKISTAN REFINERY
Pakistan’s National Refinery Limited has announced production and supply of VLSFO, according to a statement filed by the company on the Pakistan Stock Exchange on Monday.
This comes after a “necessary change in crude mix and adjustments in production process”, the refinery said.
OTHER NEWS
– Oil prices fell on Tuesday as a stronger U.S. dollar compounded concerns that demand for fuel will be held back by major central banks holding interest rates higher for longer.
– The cost of chartering a supertanker to load Middle Eastern crude for Asia has rebounded after hitting a 19-month low, but industry sources expect output supply cuts led by Saudi Arabia to cap freight rates for the rest of the year.
– Chevron Corp plans to add 65,000 barrels per day (bpd) of Venezuelan oil output by the end of 2024 through its first major drilling campaign in the nation, ever since Washington allowed it to restore production clipped by U.S. sanctions.
– Egypt awarded on Tuesday four blocks in an oil and gas exploration bid round for concessions in the Mediterranean and Nile Delta to Italy’s Eni, BP, QatarEnergy, and Russia’s Zarubezhneft, the petroleum ministry said.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shilpi Majumdar)