SINGAPORE: Spot cash premiums in Asia’s fuel oil market were stable on Monday amid thin trade, while Kuwait’s Al Zour issued its first tender for very low sulphur fuel oil (VLSFO) following a near eight-week hiatus, trade sources said on Monday.
Over the weekend, the refinery had offered 120,000 to 150,000 tonnes of 0.5% VLSFO for loading between May 27 and 28, in a tender that closes on Monday, according to the sources.
But the tender appeared to have limited impact on spot prices at the start of the new trading week.
Asia’s cash premium for 0.5% VLSFO eased slightly at $7.23 a tonne, though the front-month margin gained from its previous session to a premium of $8.60 a barrel at 0830 GMT.
Meanwhile, Asia’s spot high sulphur fuel oil (HSFO) market was also little changed on Monday. The cash premium for 380-cst HSFO closed at $5.60 a tonne, while the front-month margin climbed to a discount of $8.02 a barrel.
Bunker sales hit three-month highs at the world’s biggest refuelling hub Singapore in April, the latest official data showed, as prices were more competitive than regional ports.
Sales climbed for a second consecutive month to 4.25 million tonnes, up 2% month-on-month and 14% from a year earlier, Singapore’s Maritime and Port Authority data showed.
The rise reflected higher vessel calls for bunkering, which totalled 3,495 calls in April, extending gains after hitting two-year highs in March.
Bunker prices for VLSFO at Singapore were $5 to $20 lower than China’s Zhoushan in April and May so far, according to bunker traders.
Oil prices were steady on Monday as bullish sentiment about tightening supplies from OPEC+ cuts and a resumption in US buying for reserves competed with concerns on fuel demand in top global oil consumers the United States and China.
Leaders of the Group of Seven (G7) nations plan to tighten sanctions on Russia at their summit in Japan this week, with steps aimed at energy and exports aiding Moscow’s war effort, said officials with direct knowledge of the discussions.
Sour crude oil supplies for US Gulf Coast oil refiners will be squeezed in coming weeks, market participants said, as global demand rises following this month’s OPEC+ production cut.