Asia’s very low sulphur fuel oil (VLSFO) market softened on Tuesday after Kuwait’s Al Zour refinery issued a fuel oil sales tender for the first time in more than two months.

The refinery offered 120,000 to 140,000 metric tons of 0.5% VLSFO for loading between September 9 and 10, in a tender that closes on Tuesday, traders said.

The refinery last closed a term tender offering VLSFO for loading between July and December, while spot tenders quietened down after that.

Asia’s 0.5% VLSFO crack for September LFO05SGDUBCMc1 slipped day-on-day at a premium of $11.33 a barrel by 0830 GMT, while spot cash differential MFO05-SIN-DIF fell to a premium of $6.50 a metric ton.

High sulphur fuel oil (HSFO) also retreated, with the product trading at a lower premium to Singapore quotes for end-September loading.

The 380-cst HSFO cash differential FO380-SIN-DIF fell to a premium of $9 a metric ton, though September crack FO380DUBCKMc1 was little changed at a discount of $6.31 a barrel.

OTHER NEWS

– Oil prices traded flat on Tuesday as worries that further possible U.S. interest rate hikes could pull down demand were countered by concerns a tropical storm off the U.S. Gulf Coast may impact supply.

– Chinese state-owned oil and gas giant CNOOC has signed a strategic cooperation agreement with Brazilian state oil firm Petrobras, Chinese government-backed media outlet The Paper reported on Tuesday, citing CNOOC.

– Japan’s government is considering extending until year-end fuel subsidies to keep gasoline prices below 180 yen a litre and is working on a separate budget to finance this measure, three people with direct knowledge of the matter said on Tuesday.

– Chevron’s two major liquefied natural gas production facilities in Australia could face daily work stoppages of up to 10 hours next week after unions on Tuesday threatened labour action in a dispute over pay and conditions.

WINDOW TRADES O/AS

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

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