SINGAPORE Asia’s cash premiums and refining margins for very low sulphur fuel oil (VLSFO) slipped on Monday as the East of Suez remains adequately supplied with high inventory levels.
Singapore’s spot 0.5% VLSFO cash premium slid to $8.97 a tonne, while the market’s front-month crack fell from the previous session to $8.73 a barrel at the Asia close (0830 GMT).
High sulphur fuel oil (HSFO) premiums have also come under pressure in Singapore amid competitive offers. The spot 180-cst HSFO cash differential fell to $2.17 a tonne on Monday, hitting its lowest in more than three weeks.
Meanwhile, in the Middle East, Saudi Aramco’s Jizan refinery is set to increase output of ultra-low sulphur diesel (ULSD) and reduce exports of vacuum gasoil (VGO) as it ramps up production into the second quarter, industry sources said.
The refinery’s hydrocracker unit and integrated gasification combined-cycle (IGCC) plant have just been started up, they added. This could end Jizan’s residual fuel exports, with about 90,000 bpd of high-sulphur fuel oil and vacuum residues estimated to be fed into the power plant, said consultancy FGE.
Jizan offered one VGO cargo of 80,000 tonnes (500,000 barrels) for April 15-17 loading, industry sources said, though exports are likely to fall in subsequent months.
Oil prices rose on Monday as investors assessed efforts by authorities to rein in concerns over the global banking system, while Russian President Vladimir Putin’s plans to place tactical nuclear weapons in Belarus ratcheted up tensions in Europe.
Saudi Aramco signed an agreement with Chinese partners on Sunday for an oil refinery and petrochemical project in northeast China that is expected to start in 2026 to meet the country’s growing demand for fuel and chemicals.
Thailand’s oil and gas retailer, PTT Oil and Retail Business Pcl on Monday said it plans to invest $900 million this year to expand its local and overseas business.
China’s crude oil refinery throughput this year is forecast to rise 7.8%, according to a think tank of state energy group CNPC, reversing last year’s decline the world’s second-largest oil consumer is set for a recovery in fuel demand.
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