SINGAPORE: The spot 0.5% very low sulphur fuel oil (VLSFO) market in Asia rebounded on Tuesday after trending lower since early-February.
The market’s cash differential rose to $5.54 a tonne to Singapore quotes on Tuesday, as stronger bids emerged for end-March to early-April loading.
Meanwhile, the front-month refining margin firmed day-on-day to $10.56 a barrel at the Asia close (0830 GMT), though remained weaker compared to margins of clean distillates.
Amid the comparatively lower margins, refiners in Asia are likely to channel less blending components to the VLSFO pool, which could cap regional VLSFO production for early Q2.
However, tepid downstream bunkering demand is expected to limit the upside in the cargo market. Bunkering premiums on a delivered basis were in a tight range of $10 to $15 so far this week, showing little recovery from the previous week, trade sources said Tuesday.
Oil prices were little changed on Tuesday as concerns about limited spare capacity in the market and Russian supply uncertainty offset mixed oil data from top crude importer China.
The second phase units for Kuwait’s Al Zour refinery are now operating, state news agency KUNA cited KIPIC CEO Waleed Al-Badr as saying on Tuesday.
Russia began diesel exports to Saudi Arabia in February as it seeks to contend with an EU embargo on Russian supplies, traders said and Refinitiv data shows.
Fuel deliveries and refining was disrupted at several French refinery and storage sites operated by Total Energies and Esso on Tuesday due to a strike against the government’s planned pension reform.
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