SINGAPORE: Asia’s refining margin for very low sulphur fuel oil (VLSFO) declined further on Wednesday despite softer crude oil prices, as steady supply arrivals continued to weigh on the market.

The Singapore front-month January crack for 0.5% very low sulphur fuel oil (VLSFO) was at a premium of $10.73 a barrel to Dubai quotes at the Asia close (0830 GMT) on Wednesday, down $1.56 from the previous day.

Recovery in the spot VLSFO cash differential also remains capped, which slid 42 cents to a premium of $19.03 a tonne to Singapore quotes on Wednesday.

The high sulphur fuel oil (HSFO) market trended steady to weaker in recent sessions, as expectations of more incoming Russian barrels weighed on sentiment, despite lower exports from the Middle East to Asia.

The 180-cst HSFO cash differential was at a discount of $2.42 a tonne to Singapore quotes, while the 380-cst HSFO cash differential dipped 95 cents to a premium of $1.67 a tonne.

Residual fuel oil stocks at Fujairah fell 5% to 12.56 million barrels (1.98 million tonnes) in the week ended Dec. 5, data from the Fujairah Oil Industry Zone showed. Latest stocks are at a six-week low.

Oil weakened on Wednesday, with Brent crude falling close to its lowest this year, pressured by concerns about a recession and easing fears that a Western cap on Russian oil prices would significantly curb supply.