The refining margin for very-low sulphur fuel oil (VLSFO) edged slightly higher on Monday after its recent tumble to more than two-year lows.

The front-month crack spread for 0.5% VLSFO closed higher at a premium of $6.72 a barrel by 0830 GMT.

Meanwhile, cash differential for 0.5% was pegged at a discount of $2.40 a metric ton on Monday, as multiple offers persisted.

High sulphur fuel oil (HSFO) was little changed, with the 380-cst HSFO cash differential FO380-SIN-DIF at a premium of $12.25 a ton, while product margin climbed to a discount of $7.06 a barrel.

In tenders, India’s MRPL offered vacuum gasoil (VGO) for loading in August. The tender closes on Tuesday.

BUNKER UPDATES

BP Marine, part of BP’s trading and shipping business, has entered a long-term supply agreement with transport company StraitNZ to supply marine biofuels at New Zealand’s port of Wellington, BP said in a recent statement.

This marks the first biofuel bunker supply at the port of Wellington and will commence from early 2024.

The fuel will include 24% used cooking oil methyl ester (UCOME) biofuel blended with VLSFO, the company said.

OTHER NEWS

– Oil prices were steady on Monday as traders expected more rate hikes from U.S. and European central banks, but tightening supply and hopes for Chinese stimulus underpinned Brent at well above $80 a barrel.

– Iraq and Lebanon signed a memorandum of understanding (MoU) on Iraq providing Lebanon with fuel oil and crude oil, Iraqi state news agency INA reported.

– Sri Lanka’s Ceypetco has issued its second tender this year to buy high-sulphur gasoil contract cargoes for a four-month delivery window starting November, a document on the company website showed on Monday.

– Chinese oil refiners and petrochemical companies are investing tens of billions of dollars to produce high-end chemicals for solar panels and lithium-ion batteries to profit from growing demand for energy transition technologies.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shounak Dasgupta)