SINGAPORE Asia’s cash premium for very-low sulphur fuel oil (VLSFO) eased further on Monday as offers dipped from the previous week, with its recent rally losing steam in line with market expectations.
The 0.5% VLSFO cash premium dipped to $14.75 a metric ton over cargo quotes, while its refining crack closed lower at a premium of $13.22 a barrel at the Asia close (0830 GMT).
The market had rallied higher earlier in the month on strong bidding, but expectations of ample imports capped further strength. Meanwhile, the spot high sulphur fuel oil (HSFO) market started the week on a stable note in Asia.
The 380-cst HSFO cash premium gained slightly at $2.95 a metric ton on Monday, though its crack spread eased to a discount of $6.90 a barrel, after hitting more than one-year highs last week. Oil prices rose on Monday after a revolt by Russian mercenaries over the weekend raised concerns about political instability in Russia and the potential impact on oil supply from one of the world’s largest producers.
Shipping group AP Moller-Maersk said it had ordered six mid-size container vessels capable of running on green methanol from China’s Yangzijiang Shipbuilding Group.
Indonesia’s state energy company Pertamina reached a $3.1-billion financing deal with a number of export credit agencies and commercial banks to fund the upgrade of its Balikpapan refinery, the company said.
China is relentlessly adding new petrochemical capacity despite a global glut as the country’s refiners diversify from transport fuels, threatening to depress margins worldwide through 2024 as weak economic growth saps demand.