SINGAPORE: The cash premium for very low sulphur fuel oil (VLSFO) fell further on Tuesday, sliding to an eleven-week low, as prospects of easing supply tightness continued to cool the market.
The 0.5% VLSFO cash differential fell $6.74 to a premium of $40.09 per tonne over Singapore quotes on Tuesday. The premium has eased off sharply compared to its record high of $86.23 in mid-July.
Regional refiners in Asia have raised VLSFO exports in end-July and August, which is likely to help ease a supply tightness that has persisted for two months.
Meanwhile, cash differentials for high sulphur fuel oil (HSFO) were little changed on Tuesday. The 180-cst HSFO cash differential rose 92 cents to $3.78 per tonne over Singapore quotes on Tuesday, while the 380-cst HSFO cash differential dipped 41 cents to a premium of $5.75 per tonne.
India’s Nayara Energy sold a 40,000-tonne LSFO cargo to Vitol for loading between August 11-15, and another 40,000-tonne LSFO cargo to Shell for loading between August 20 and 24.
The tenders were concluded at premiums of $50-60 per tonne to the average of Singapore spot 0.5% VLSFO assessments, market sources said. Meanwhile, South Korea’s S-Oil sold a 300,000-barrel light cycle oil (LCO) cargo to Shell for loading between August 24-28, at an unknown price. S-Oil also sold a 24,000-tonne slurry cargo for loading between August 16-20, but further details were not immediately available.
Oil slipped on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as OPEC+ producers meet this week to decide whether to increase supply.
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