Trading momentum in the Asia high sulphur fuel oil (HSFO) market took a breather on Wednesday, slowing from the previous sessions, while backwardation narrowed at the prompt months.

Singapore cash differential for 380-cst HSFO remained at a premium above $12 a metric ton, though steadying after several brisk trading sessions this month.

The balance-June/July backwardation narrowed, inching closer to $15 a metric ton on Wednesday, compared with slightly above $17 the previous day, data from trade sources showed.

The broader market remained awash with supply, which has been weighing on bunker differentials, trade sources said.

Meanwhile, very low sulphur fuel oil (VLSFO) was pegged at a slightly higher premium of $7.50 a metric ton to cargo quotes, after a firmer trade emerged.

Refining margins for VLSFO, were rangebound above $10 a barrel, while HSFO cracks, softened into wider discounts.

REFINERY UPDATES

– Russia’s TAIF-NK oil refinery will halt fuel production for a month of planned maintenance from June 15, three industry sources told Reuters.

OTHER NEWS

– Oil prices softened on Wednesday as markets assessed the outcome of U.S.-China trade talks, yet to be reviewed by President Donald Trump, with weak oil demand from China and OPEC+ production increases weighing on the market.

– Oil demand growth will remain robust over the next two and a half decades as the world population grows, OPEC Secretary General Haitham Al Ghais said.

– The European Commission proposed an 18th package of sanctions against Russia for its invasion of Ukraine, aimed at Moscow’s energy revenues, its banks and its military industry.

– The U.S. will significantly reduce the amount of biodiesel and renewable diesel it imports this year because of a federal tax credit change, the Energy Information Administration forecasted.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: One trade
Source: Reuters