Refining margins for very low sulphur fuel oil (VLSFO) in Asia posted a mild weekly gain despite heavy supply arrivals this month, data showed Friday.

The front-month April margin for 0.5% VLSFO rose 5 cents from its previous session to $8.75 per barrel at the Asia close (0830 GMT), firming by 5% week-on-week.

Arbitrage supplies are likely to remain heavy into March, though arrivals could ease in April amid expectations of lower exports from the West due to spring maintenance in Europe, industry sources said.

A narrower East-West price spread could also incentivise less arbitrage volumes to the East of Suez in April, they added.

Meanwhile, Singapore’s cash differential for 0.5% VLSFO (MFO05-SIN-DIF) held steady at $4.50 a tonne on Friday. The spot market has been hovering in thin single-digit premiums since the start of the month.

ARA INVENTORIES (STK-FO-ARA)

Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub jumped 14% to 1.30 million tonnes in the week ended March 9, hitting 20-month highs, latest data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil fell for a fourth session on Friday, heading for its biggest weekly loss in five weeks on worries about steep interest rate hikes in the United States hitting fuel demand.

– Private Indian refiners are jostling with independents in China for Russian ESPO crude loading in April, pushing prices higher after Moscow lowered exports of its flagship grade Urals, industry sources said.

– India’s fuel demand hit its highest level in at least 24 years in February, data showed, with industrial activity in Asia’s third biggest economy boosted by cheap Russian oil.
– The European Union struck a deal on Friday to cut final energy consumption across the bloc by 11.7% by 2030, a goal lawmakers said would help fight climate change and curb Europe’s use of Russian fossil fuels.

WINDOW TRADES

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

Source: Reuters