SINGAPORE: Asia’s cash premium for very-low sulphur fuel oil (VLSFO) soared to a four-month high on Monday as bids for July-loading cargoes continued to firm.
Trading house Gunvor was bidding at $17 a metric ton over Singapore quotes for 0.5% VLSFO loading between July 4-8, July 9-13, or July 14-18, during the Platts window.
Reflecting the firmer bids, the cash premium for the product was pegged at $17.25 a ton over Singapore quotes on Monday, while front-month refining margin closed higher at a premium of $13.88 a barrel at the Asia close (0830 GMT), holding at over four-month highs.
The market structure has also firmed, with front-month July/August backwardation time spread widening to $18.75 a ton at the Asia close.
Some fuel oil traders said that the recent market strength is unlikely to sustain as incoming supplies are not expected to tighten significantly in July.
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