SINGAPORE: The very low sulphur fuel oil (VLSFO) market eased slightly on Friday, as tight supply of blending components for July capped limited price declines.
The 0.5% VLSFO cash differential was at a premium of $75.67 a tonne on Friday, compared with $77.14 a tonne on Thursday, Reuters data showed.
The high sulphur fuel oil (HSFO) market also started July on a stable to softer note, as ample supply outweighed indicators of firm seasonal demand from South Asia.
The 180-CST HSFO differential was at a discount of $1.73 a tonne on Friday, compared with a discount of $1.43 a tonne on Thursday.
The 380-CST HSFO differential was at a discount of $1.66 a tonne on Friday, versus a discount of $1.41 in the previous session.
Pakistan’s PSO is seeking four fuel oil cargoes for September delivery, according to an invitation to supply on its website published earlier this week.
The cargoes include one HSFO and one LSFO cargo for delivery in the first half of September, and another HSFO and LSFO cargo for the second half of September. For the past three months, Pakistan has been actively issuing purchase tenders for fuel oil, amid a heatwave that is driving power generation demand. The country has struggled to buy liquefied natural gas for power generation due to higher prices and volatile supply. Elsewhere, Vietnam’s Nghi Son is offering one LSFO cargo for delivery on July 14-16, according to a notice of sale plan on its website published Thursday.
Fuel oil inventories in the ARA refining and storage inched lower 1% to 1.25 million tonnes in the week ended June 30, latest data from Dutch consultancy Insights Global showed. Inventories were at a three-week low.
Oil prices fell on Friday as lingering fears of a recession weighed on sentiment, putting the benchmarks on track for their third straight weekly losses.
OPEC+ said on Thursday it would stick to its planned oil output hikes in August but avoided discussing policy from September onwards even as prices have risen on tight global supplies and worries that the group has little ability to pump more crude.
India has restricted exports of gasoil and gasoline to help boost supplies in the local markets, a move that could curtail overseas sales by refiners Reliance Industries Ltd and Nayara Energy, part owned by Russian oil major Rosneft.
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