Asia’s spot differential for very low sulphur fuel oil (VLSFO) edged higher on Monday after stronger bids emerged, though it remained in a discount as the prompt market structure continued to hold in a steady contango.

The Singapore VLSFO cash differential was pegged at a discount of 45 cents per metric ton, with higher-priced bids emerging for loading dates in the second half of October.

Spot trading momentum remained thin as the market awaited fresh tenders. In the derivatives market, inter-month spreads also traded at broadly stable levels from the previous week.

Cash differential for 380-cst high sulphur fuel oil (HSFO) softened slightly, dipping below a premium of $1 per ton.

Cracks for both grades held largely stable for October contracts. The VLSFO crack (LFO05SGBRTCMc1) closed at a premium of $6.75 a barrel, while the 380-cst HSFO crack (FO380BRTCKMc1) closed at a discount near $3.90 a barrel, according to data compiled by LSEG.

REFINERY UPDATES

– Brazil’s oil regulator ANP has provisionally shut down the private Refit refinery in Rio de Janeiro after identifying operational irregularities and suspected irregular fuel imports, the agency’s director general said.

OTHER NEWS

– Oil prices dropped on Monday after Iraq’s Kurdistan region resumed crude oil exports via Turkey over the weekend, coupled with OPEC+ plans for another oil production hike in November, adding to global supplies.

– Terminal operators in a major oil port in east China’s Shandong province are set to introduce measures to ban shadow fleet vessels and curb visits by other old tankers, according to an official notice seen by Reuters and a tanker tracker.

– Indian Oil Corp, the country’s top refiner, is in talks with European trader Vitol to set up a trading joint venture to expand its exposure in global oil markets, three IOC sources told Reuters.

– Indonesia state energy firm Pertamina said fuel retailer Vivo Energy Indonesia (Vivo) has agreed to buy 40,000 barrels of gasoline, out of the 100,000 barrel cargo Pertamina has imported, to help relieve fuel shortages at private retailers.

WINDOW TRADES

– 180-cst HSFO: No trade – 380-cst HSFO: No trade – 0.5% VLSFO: No trade

Source: Reuters