Asia’s high sulphur fuel oil (HSFO) market softened for a fourth consecutive session on Tuesday, though multiple bids for spot parcels continued to emerge.

The 380-cst HSFO cash differential FO380-SIN-DIF fell to a premium of $25.17 a metric ton on Tuesday, while front-month refining crack FO380DUBCKMc1 edged lower to a discount of $7.64 a barrel at 0430 GMT.

Meanwhile, very-low sulphur fuel oil (VLSFO) was range-bound. Cash differential MFO05-SIN-DIF closed at a premium of $3.40 a metric ton, while the refining crack LFO05SGDUBCMc1 slipped to a premium of $9.60 a barrel.

The Hi-5 spread, which is the premium of 0.5% VLSFO over 380-cst HSFO, has begun to widen in recent sessions after the rally in HSFO gave way.

Front-month Hi-5 FO05-380SGMc1 was pegged at $109.50 a metric ton, recovering to a one-month high, Refinitiv data showed. The spread had crunched significantly in July after the VLSFO market crashed.

HOUSTON FUEL CONTAMINATION UPDATE

A total of 14 vessels have suffered damage to their engines and systems so far after a batch of contaminated VLSFO at Houston came to light earlier in July, marine fuel testing service VPS said late Monday.

Twelve of these vessels bunkered in Houston, while the other two bunkered in Singapore.

The volume of contaminated fuel delivered to the 32 vessels totalled 61,494 metric tons and was delivered by four suppliers.

The contamination arose from the presence of dicyclopentadiene (DCPD) isomers at significantly high levels within the VLSFO bunker fuel deliveries at Houston, it added.

OTHER NEWS

– Oil prices rose in early Asia trade on Tuesday as supply concerns arising from production cuts by Saudi Arabia and Russia supported the market.
– China’s crude oil imports in July rose 17% year on year, customs data showed on Tuesday as domestic inventories continued to build and overseas fuel exports surged.
– India’s fuel consumption, a proxy for oil demand, rose by 1.9% year-on-year in July to about 18.09 million metric tons, data from the Petroleum Planning and Analysis Cell of the oil ministry showed on Tuesday.
– Saudi Aramco’s CEO Amin Nasser said the company’s supplies to customers remain adequate even with recent voluntary oil production cuts by the kingdom, adding that global demand remained resilient despite economic headwinds.

WINDOW TRADES O/AS

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

Source: Reuters reported by Jeslyn Lerh and edited by Sohini Goswami