BEIJING: Asia’s fuel oil cash differentials retreated on Tuesday, as prospects of more incoming supply replenishment capped further gains from previous sessions. Cash differentials for 380-cst HSFO fell to a premium of $5.16 per tonne to Singapore quotes on Tuesday, versus $5.30 per tonne on Monday.
Total fuel oil flows into East Asia are pegged higher on-month in May between 5.5 to 6.0 million mt, according to trade flow assessments by Refinitiv Oil Research as of Tuesday. Asia’s 0.5% very low-sulphur fuel oil (VLSFO) market also eased slightly on Tuesday after hitting a fresh record high on Monday.
The cash premiums for Asia’s 0.5% VLSFO were at $42.78 a tonne to Singapore quotes on Tuesday, versus $43.66 a tonne on Monday. Backwardation in the VLSFO front-month time spread also softened at $37.50 per tonne on Tuesday, after widening to two-month highs of $38.50/mt at the Asia 4:30pm (Singapore time) close on Monday, Refinitiv data in Eikon showed.
Oil prices fell on Tuesday as concerns over a possible recession and China’s COVID-19 curbs outweighed an expectation of tight global supply and a pick-up in fuel demand with the US summer driving season.
Sri Lanka increased fuel prices on Tuesday, a long-flagged move to mend public finances and combat its debilitating economic crisis, but the hikes are bound to add to galloping inflation at least in the short term.