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Asia Fuel Oil-Spot VLSFO market extends fall on multiple spot offers

Tuesday, 11 June 2024 | 00:00

Spot premiums for very low sulphur fuel oil (VLSFO) extended declines on Monday as selling interest persisted with multiple spot offers.

The Singapore cash premium traded lower to $1 a metric ton, while the market structure continued to soften at the prompt months with narrowing backwardation.

Refining margins for VLSFO rebounded to slightly above $8 a barrel, based on LSEG data.

But supplies remained broadly ample for the VLSFO market and this has capped benchmarks, according to industry sources and ship-tracking data.

In recent tenders, Indonesia’s Pertamina offered its residual fuel products for July loading, including V-1250 fuel and decant oil. The tender closes on Monday.

Meanwhile, the high sulphur fuel oil (HSFO) market has steadied in recent sessions. A recent rally has pared amid expectations of more supply replenishment.

The 380-cst HSFO cash premium was pegged at $12 a ton on Monday, while cracks eased further at discounts of around $6.70 a barrel.

OTHER NEWS

– Oil prices edged up on Monday, buoyed by hopes of rising fuel demand this summer, though gains were capped by a strengthening of the dollar on receding expectations of imminent cuts to U.S. interest rates.

– Saudi Aramco’s shares gained on Sunday, the first trading day after a secondary share offering expected to raise at least $11.2 billion.

– Diesel fuel prices in much of Malaysia are set to rise by roughly 50% on Monday as the government begins shifting away from costly blanket subsidies to a targeted approach that mainly helps the needy.

– The Biden administration said on Friday it has increased purchasing of crude oil to replenish the Strategic Petroleum Reserve following its historic sale from the stockpile in 2022.

WINDOW TRADES

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

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