Asia’s cash differential for very low sulphur fuel oil (VLSFO) flipped from a discount into a premium as of Monday, even as overall fundamentals were still largely bearish.
Trade was quiet on Monday, though bids and market structure improved for VLSFO loading in September.
The Singapore VLSFO differential was pegged at a premium of about 50 cents to cargo quotes, after holding in discounts since Aug. 8, pricing data showed.
Meanwhile, market backwardation for VLSFO also widened between the prompt months.
In contrast, high sulphur fuel oil (HSFO) continued to weaken, with differentials slipping into wider discounts, underpinned by ample supplies.
REFINERY UPDATES
– Ukraine launched a drone attack on Russia on Sunday, forcing a sharp fall in the capacity of a reactor at one of Russia’s biggest nuclear power plants and sparking a huge blaze at the major Ust-Luga fuel export terminal, Russian officials said.
– A fire at Russia’s Novoshakhtinsk refinery was burning for the fourth day on Sunday after a Ukrainian drone strike, the acting governor of the region said.
– Exxon Mobil Corp plans a six-week overhaul in February 2026 on the small crude distillation unit at its 612,000 barrels-per-day Beaumont, Texas, refinery, said people familiar with plant operations.
– Phillips 66’s 356,000 barrels-per-day Wood River refinery in Illinois had issues with its crude unit, trading sources said on Friday.
OTHER NEWS
– Oil prices rose on Monday after Ukraine stepped up attacks on Russia, fanning concerns Russian oil supply could be disrupted, while expectations for a cut in U.S. interest rates buoyed the outlook for global growth and fuel demand.
– Iraq has raised its oil refining capacity to 1.3 million barrels per day from 1.1 million bpd in 2024, the prime minister’s office said in a statement on Sunday.
– India’s crude oil imports fell 8.7% in July to 18.56 million metric tons month-on-month, the lowest level since February 2024, government data showed on Monday.
– Indonesia urged the European Union on Monday to immediately scrap countervailing duties on imports of biodiesel, after the World Trade Organization backed several of its key claims in a complaint to the trade body.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters