SINGAPORE: Asia’s very low sulphur fuel oil (VLSFO) market remained under downward pressure as of Thursday on expectations of more supply next month.
The 0.5% VLSFO cash differential fell for an eighth consecutive day to a premium of $48.30 per tonne over Singapore quotes on Thursday, staying at two-month lows.
Downstream bunker fuel premiums for 0.5% VLSFO have also declined from the previous week, tracking the recent slide in cargo cash premiums. Singapore bunker fuel premiums on a delivered pricing basis hovered between $70 to $80 per tonne this week, traders said.
In contrast, differentials in the high-sulphur fuel oil (HSFO) market edged slightly higher towards end-July, although margins for the grade remained weak.
The 380-cst HSFO cash differential rose 53 cents to a premium of $3.60 per tonne to Singapore quotes on Thursday, standing at two-month highs.
Singapore fuel oil inventories fell 9% to an eleven-week low of 18.05 million barrels (2.84 million tonnes) in the week to July 27, latest data from Enterprise Singapore showed.
Oil rose more than $1 a barrel on Thursday, extending gains from the previous session, buoyed by improved risk appetite among investors as lower crude inventories and a rebound in gasoline demand in the United States supported prices.
Top oil exporter Saudi Arabia could raise September crude prices for customers in Asia for a third month, even though refining margins have declined as high fuel prices and persistent COVID-19 restrictions in China hit demand.
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