SINGAPORE: Asia’s market for very low sulphur fuel oil (VLSFO) remained under pressure on Wednesday amid competitive selling interest, as higher supply weighed further on cash premiums and cracks.
The 0.5% VLSFO cash differential fell $14.72 to a premium of $25.37 per tonne over Singapore quotes on Wednesday, the lowest in three months.
Front-month refining cracks declined to $9.71 per barrel at the Asia close (0830 GMT), hitting close to 15-month lows, Refinitiv data showed.
Downstream bunker fuel premiums for 0.5% VLSFO have also softened across Asian ports over the past few days, bunker traders said. Singapore bunker fuel premiums on a delivered basis fell to about $50 per tonne over Singapore quotes this week, they added.
Meanwhile, cash and bunker fuel differentials for high sulphur fuel oil (HSFO) held steady on Wednesday. The 380-cst HSFO cash differential fell $1.34 to a premium of $4.41 per tonne.
The Maritime and Port Authority of Singapore (MPA) said on Wednesday it will suspend Glencore Singapore’s bunkering licence for two months after the company was found to have supplied contaminated fuel to ships. he suspension will take effect from Aug. 18, the MPA said in a statement. It found no evidence that Glencore or PetroChina had intentionally contaminated the high-sulphur fuel oil (HSFO).
Between March 21-23, the fuel oil testing laboratory engaged by Glencore had reported results showing that samples taken from the fuel oil parcels that Glencore purchased contained concentrations of chlorinated organic compounds (COCs) ranging from about 2,000 to 15,000 parts per million (ppm).
MPA’s investigation found that despite this, Glencore continued to supply bunkers blended with the fuel purchased that was contaminated with the high COC levels to vessels in the Singapore port from March 22 to April 1.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues fell 3% from the previous week to 12.48 million barrels (1.97 million tonnes) in the week ended Aug. 1, latest data from S&P Global Commodity Insights showed.
Oil prices dipped on Wednesday ahead of a meeting of OPEC+ producers at which producers are expected to keep output steady with spare capacity limited and against the backdrop of fears that a slowdown in global growth will hit fuel demand.
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