Asia’s very low sulphur fuel oil (VLSFO) market continued to hold in a steady discount on Tuesday, with the market eyeing more residual fuel exports from Nigeria’s Dangote refinery.
Dangote offered a cargo of residual fuel totalling 130,000 tons for loading between Sept. 22 and 24, in its latest tender closing on Wednesday, according to market sources.
The refinery is expected to continue issuing sales tenders for fuel oil as its gasoline production unit has been taken offline.
Even before the tenders, the VLSFO market has already been leaning towards bearish due to ample supply, said market sources. A fuel oil trader said that margins are still looking thin going into the short term.
Singapore cash differential for VLSFO was pegged at a discount of about $1.30 a metric ton on Tuesday, while cracks (LFO05SGBRTCMc1) dipped below a premium of $8 a barrel, based on data compiled by LSEG.
In contrast, cracks for 380-cst high sulphur fuel oil (HSFO) (FO380BRTCKMc1) traded higher to a discount of $4.25 a barrel at the Tuesday close amid volatile activity.
OTHER NEWS
– Oil extended gains on Tuesday, supported by OPEC+’s latest oil output hike being smaller than anticipated, expectations that China will continue stockpiling oil and concerns over potential new sanctions on Russia.
– Saudi Arabia, the world’s top oil exporter, cut the official selling price for the Arab Light crude it sells to Asia a day after OPEC+ producers agreed to raise output.
– Japan’s Mitsui O.S.K. Lines wants to tie up with Indian companies to build tankers in India, aiding the South Asian nation’s effort to boost local manufacturing, its chief executive, Takeshi Hashimoto said.
– The use of alternative fuels in shipping will accelerate after 2030 as tighter emissions standards come into effect, in contrast to the stop-start transition for now, shipping executives told the APPEC conference in Singapore on Tuesday.
WINDOW TRADES
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters
