Asia’s high sulphur fuel oil (HSFO) weakened sharply on Thursday, a sign that the rally in early August had lost steam.

The cash differential for 380-cst HSFO FO380-SIN-DIF fell to a premium of $9 a metric ton to Singapore quotes as the product traded lower. Both bids and offers have retreated.

Meanwhile, the 380-cst HSFO September crack FO380DUBCKMc1 declined to a discount of $6.40 a barrel at 0830 GMT.

The very low sulphur fuel oil (VLSFO) market continued to hold steady, with the 0.5% VLSFO cash differential MFO05-SIN-DIF inching higher to a premium of $5.92 a metric ton.

The September crack for 0.5% VLSFO LFO05SGDUBCMc1 closed at a premium of $10.61 a barrel.

In tenders, Taiwan’s CPC offered catalyst fractionator bottom for September loading. The tender closes on Thursday and is valid until August 28.

SINGAPORE INVENTORIES O/SING1

Onshore fuel oil stocks STKRS-SIN rose 10% to 22.10 million barrels (3.48 million metric tons), data from Enterprise Singapore showed.

The UAE was the top origin for Singapore’s fuel oil imports, with volumes at 354,000 tons, versus zero volume last week.

A strong high-sulphur market continued to provide a draw for Middle Eastern barrels to Asia, according to ship-tracking data from Refinitiv.

OTHER NEWS

– Oil prices steadied on Thursday caused by disappointing economic data from key economies, with investors awaiting a speech by U.S. Federal Reserve Chair Jerome Powell on Friday for clues on interest rate moves.

– Saudi Arabia will likely roll over a voluntary oil cut of 1 million barrels per day for a third consecutive month into October, five analysts said, amid uncertainty about supplies and as the kingdom targets drawing down global inventories further.

– Shell is considering a sale of its Singapore refining and petrochemical plants as part of a broader strategic review and has hired investment bank Goldman Sachs to explore a potential deal, said several sources close to the matter.

– The third phase of China’s largest single coastal oil storage facility has been completed and went into operation on Wednesday in Qingdao port, in the eastern province of Shandong, the state media outlet China News reported.

WINDOW TRADES O/AS

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

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