SINGAPORE: The market structure for very low sulphur fuel oil (VLSFO) strengthened in Asia on Thursday, while inventories at key trading hub Singapore extended declines and maintained near a six-month low.
The front-month timespread for 0.5% VLSFO widened to a backwardation of $10.95 a tonne at the Asia close (0830 GMT), compared with $8 a tonne in the previous day.
Market sources said that this was not fundamentally driven as demand remained average, while supplies to East of Suez did not tighten significantly.
Demand for bunkers has trended steady to poorer week-on-week, with delivered premiums for 0.5% VLSFO sliding to a range of mid $10s to low $20s over Singapore cargo quotes, traders said this week.
Meanwhile, the cargo cash premium for 0.5% VLSFO closed at $11.75 a tonne to Singapore quotes on Thursday, while front-month margin was at a premium of $11.94 a barrel at 0830 GMT. High sulphur fuel oil (HSFO) was little changed, with spot 380-cst HSFO cash premium stable at $5.25 a tonne, though front-month margin climbed to a discount of $7.31 a barrel.
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