SINGAPORE: The spot 180-cst high sulphur fuel oil (HSFO) market sank into steeper discounts on Wednesday, after the product traded at lower offers.

The cash differential for 180-cst HSFO slipped to a discount of $3.58 a metric ton to Singapore quotes, while the front-month crack closed at a discount of $7.15 a barrel.

P66 had sold the product at lower discounts for mid-July loading compared to previous trades in the month, records showed.

Refining margins for HSFO have also been cooling off in recent sessions after hitting more than one-year highs last week.

The crack spread for 380-cst HSFO closed at a discount of $8.17 a barrel on Wednesday while the cash differential held stable at $2.83 a ton.

Spot 0.5% very-low sulphur fuel oil (VLSFO) continued to retreat, with the cash differential easing for a sixth consecutive session to a premium of $13.95 a ton, while the front-month refining crack was little changed at a premium of $12.57 a barrel.

Meanwhile, South Korea’s S-Oil recently closed a tender offering slurry and light cycle oil, for both July and August. The refiner had offered supply for dates that are slightly further out than usual, tender records showed.

Oil prices edged higher in Asia trade on Wednesday after industry data showed a larger-than-expected drawdown of U.S. inventories, but worries over interest rate hikes capped gains.

Brent crude futures slipped to a discount to Dubai quotes on Wednesday for the first time since November 2020, amid worries about looming interest rate hikes dampening growth and fuel demand in the United States and Europe, trade sources said.

Asian buyers have rushed to lock in long-term liquefied natural gas deals in the past months after prices eased, for fear of sudden price spikes as the global market remains tense after last year’s crisis, industry executives said.

Indonesian state energy company PT Pertamina plans to begin producing bioethanol from sugarcane and cassava this year and has also begun production of green hydrogen using geothermal energy, its CEO told a conference on Wednesday.