SINGAPORE: Asia’s spot premium for very-low sulphur fuel oil (VLSFO) edged higher on Monday on firmer bids, while the high sulphur fuel oil (HSFO) market remained at risk of downward pressure.
The 0.5% VLSFO cash premium climbed to $7 a tonne over Singapore quotes, while front-month refining margin closed higher at a premium of $9.90 a barrel at 0830 GMT, despite the sharp rise in crude prices on Monday.
In contrast, Asia’s HSFO market has come under pressure as seasonal demand for fuel oil from South Asia was lower than expected, with the 180-cst HSFO cash differential slumping into a discount.
Meanwhile, the 380-cst HSFO cash differential was at a premium of $2.50 a tonne on Monday, hitting more than three-month lows, while front-month crack for 380-cst HSFO slipped to a discount of $9.24 a barrel.
In tenders, Kuwait’s Al Zour refinery offered more VLSFO for June loading. The refinery offered 100,000 to 120,000 tonnes of 0.5% VLSFO for loading between June 17 and June 18, in a tender that closes on June 5, market sources said.
Oil prices rose by more than $1 a barrel on Monday after top crude exporter Saudi Arabia pledged to cut production by another 1 million barrels per day (bpd) from July to counter macroeconomic headwinds that have depressed markets.