Asia’s spot premium for very low sulphur fuel oil (VLSFO) held steady on Monday, although the market structure softened at prompt trading months amid ample supplies.
The Singapore cash premium was pegged at $4.50 a metric ton, even as market backwardation narrowed for the Dec/Jan contract.
Refining margin held stable, with December VLSFO-Dubai crack closing near premiums of $12.50 a barrel, according to LSEG data.
On the derivatives front, trade sources said that selling interest was robust for VLSFO.
Reflecting the weaker VLSFO market, the hi-5 fuel oil spread continued to narrow. December hi-5 spread FO05-380SGMc1 closed at $109.38 a metric ton on Monday, showed LSEG data.
Meanwhile, Taiwan’s CPC sought low sulphur fuel oil for delivery in January. The tender closes on Tuesday with validity until Thursday, a notice on its website showed.
REFINERY UPDATES REF/OUT
– Gunvor has undertaken a temporary economic shutdown of its Rotterdam oil refinery effective Nov. 25, the company said in a statement on Friday, citing a lack of commercially viable feedstock.
– Russia’s second-largest oil producer Lukoil is restoring operations of its catalytic cracker complex, ramping up gasoline output after the unit’s breakdown on Nov. 13, two industry sources told Reuters on Friday.
OTHER NEWS
– Oil prices steadied on Monday following 6% gains last week, with mounting tensions between Western powers and major oil producers Russia and Iran raising fears of supply disruptions and keeping a floor under prices.
– China has issued an additional crude oil import quota of at least 5.84 million metric tons (116,800 barrels per day) to independent refiners for cargoes arriving by end-2024 and in early 2025, people familiar with the situation said on Monday.
– Iran will strive not to accept limitations on its oil production quota, the country’s oil minister Mohsen Paknejad said in a video shared by state media on Monday.
– Port authorities in Singapore and Rotterdam said they have not received reports of vessels experiencing problems related to the use of cashew nutshell liquid biofuel – an issue highlighted by fuel testing agency CTI-Maritec last week.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)