Spot differential for Asia very low sulphur fuel oil (VLSFO) flipped to a premium on Monday, with markets showing some recovery into late January and early February, while more regional supply tenders closed.
Singapore’s VLSFO cash differential was pegged at a premium of 25 cents, after hovering in a discount since early December. Bids from a major trading house emerged at parity with cargo quotes on Monday, though trade remained muted.
Meanwhile, high sulphur fuel oil (HSFO) saw more trades emerging, with cash differentials logging smaller discounts compared to the previous session. In the broader market, some regional supply tenders for January loadings closed on Monday, based on data from market sources. India’s HPCL offered 33,000 tons of HSFO for loading between January 25 and 27. Meanwhile, Vietnam’s Nghi Son offered 10,000 tons of fuel oil for loading between January 12 and 14.
Separately, Indonesia’s Pertamina also offered residual fuel cargoes for loading in January, mostly comprising low-sulphur waxy residue.
Cracks inched higher from the previous week after crude prices fell. VLSFO cracks (LFO05SGBRTCMc1) closed at premiums near $4 a barrel, while 380-cst HSFO cracks (FO380BRTCKMc1) were at discounts near $6.50 a barrel, data compiled by LSEG showed.
REFINERY UPDATES
– Venezuela’s state-run oil company PDVSA has begun cutting crude production because it is running out of storage capacity due to an ongoing U.S. oil blockade. – Serbia’s Russian-owned NIS oil refinery, which is sanctioned by the United States, will be operational on January 17 or 18 after receiving a temporary licence, President Aleksandar Vucic said on Sunday.
