SINGAPORE: Refining margins for very low sulphur fuel oil (VLSFO) posted weekly declines as selling interest persisted in the spot market, while demand remained thin.
The Singapore 0.5% VLSFO front-month crack fell about 6% from the previous week, ending at a premium of $8.15 a barrel at the Asia close (0430 GMT) on Thursday.
The market’s cash differential was steady at a premium of 25 cents a tonne to Singapore quotes, though multiple offers remained.
Asia’s hi-5 rebounded day-on-day after hitting 18-month lows on Wednesday, with the front-month spread widening to $133.50 a tonne on Thursday.
Market trends for HSFO and VLSFO have diverged in recent trading sessions, as HSFO held its ground while VLSFO succumbed to downward pressure.
A narrower hi-5 spread, which is the price difference between 0.5% VLSFO and 380-cst HSFO, could prompt shippers to consider taking less HSFO for bunkering, though the trend has yet to materialise, trade sources said. Singapore markets will be closed on Friday due to a public holiday.
Oil fell on Thursday as weak US economic data raised concerns over a potential global recession and demand reduction, but benchmark prices were headed for a weekly advance after OPEC+ announced further output cuts and US oil stocks dropped.
Saudi Arabia, world’s top oil exporter, raised the prices of its flagship crude for Asian buyers for the third straight month, after major oil producers announced additional output cuts.
Record high imports of crude oil from Russia in fiscal 2022-23 helped India’s refiners boost exports of diesel and jet fuel to Europe as the continent shunned Russian products, preliminary ship-tracking data from Kpler and Vortexa showed.
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