Asia’s fuel oil benchmarks climbed on Tuesday with refining margin scaling a four-month high, while more tenders for November-loading cargoes were underway.

The front-month 0.5% VLSFO crack LFO05SGDUBCMc1 closed at a premium of $13.55 a barrel on the final trading day of October, logging a monthly increase of about 40%.

Market sources expect capped incoming supplies from Kuwait to Asia even into November.

Kuwait’s October fuel oil exports tumbled more than 30%, after hitting a record high in September as some supply was diverted to domestic power generation, according to trade sources, analysts and ship-tracking data.

Asia’s cash premium for very low sulphur fuel oil (VLSFO) MFO05-SIN-DIF rose for a third straight session to $19.88 a metric ton, as bids for spot cargoes continued to firm.

Meanwhile, high sulphur fuel oil (HSFO) steadied on Tuesday. Cash differentials for 380-cst HSFO FO380-SIN-DIF remained trapped in discounts, while cracks FO380DUBCKMc1 rose slightly to a discount of $17.75 a barrel on Tuesday.

Kuwait’s KPC offered 60,000 tons a month of HSFO for loading between November and January, while South Korea’s S-Oil offered slurry and light cycle oil for loading in November. Both tenders close on Tuesday, trade sources said.

OTHER NEWS
– Oil prices rose on Tuesday as supply worries stirred by conflict in the Middle East blunted a dismal showing of China data.

– Mexican state energy company Pemex refined less crude oil in September than the previous month, with production of fuel oil again surpassing gasoline output, data on its website showed.

– Portuguese oil company Galp Energia lifted its core profit target for the year as a widening refining margin offset a decline in output following the sale of its Angolan fields and lower oil prices.

– Venezuela’s largest refining complex, the 955,000-barrel-per-day Paraguana Refining Center, was operating at about 10% of capacity on Monday after two crude distillation units (CDUs) were shut due to a fire and lack of feedstock.

WINDOW TRADES O/AS
– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade

Source: Reuters reported by Jeslyn Lerh and edited by Varun H K