The cash premium for very low sulphur fuel oil (VLSFO) in Asia eased on Monday after hitting a year-to-date high last week, even as market backwardation remained firm for prompt months.

Singapore’s 0.5% VLSFO cash premium inched lower at $28.75 a metric ton on Monday, snapping an uptrend that lasted for six consecutive sessions.

However, refining margin edged higher to a premium of $10.86 a barrel at the Asia close, while market backwardation continued to widen.

The balance-month/Dec timespread for 0.5% VLSFO widened $2 from last week, hitting $33 a ton on Monday.

High sulphur fuel oil (HSFO) continued to log a gradual rebound. The cash differential for 380-cst HSFO climbed to a premium of $1.50 a ton, while refining margin steadied at a discount of $14.57 a barrel.

In tenders, Taiwan’s Formosa offered 40,000 tons of low sulphur fuel oil for loading at Mailiao, between Nov. 18 and 19. The tender closes on Monday.

OTHER NEWS

– Oil prices rose on Monday, after top exporters Saudi Arabia and Russia reaffirmed their commitment to extra voluntary oil supply cuts until the end of the year.

– China’s oil refinery utilisation rates are easing from record third-quarter levels as thinning margins and a shortage of export quotas discourage plants from raising output for the rest of 2023, according to traders and industry consultancies.

– State oil giant Kuwait Petroleum Corporation sees a near 14.1 billion Kuwaiti dinar ($45.7 billion) shortfall in the funds it has available to meet its five-year spending plan, and will need to borrow and sell assets to help plug the gap, a document seen by Reuters showed.

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 Shailesh Kuber