Spot cash differentials for fuel oil softened in Asia on Monday as plentiful supplies continued to underpin the market.

Singapore cash premium for very low sulphur fuel oil (VLSFO) was pegged at 75 cents a metric ton, reflecting a weaker backwardation for prompt trading months.

Kuwait’s Al Zour had offered VLSFO for loading from March 18-19 in a tender that closed last week, trade sources said. The outcome of the tender was not immediately clear.

Meanwhile, cash discounts for high sulphur fuel oil (HSFO) deepened for both the 180-cst and 380-cst grades. A competitive offer emerged for 180-cst HSFO, trade sources added.

Refining crack for VLSFO closed at a premium of around $13 a barrel on Monday, while 380-cst HSFO margin FO380DUBCKMc1 was at a discount of about $11 a barrel.

Fuel oil supplies to Asia, including low-sulphur and high-sulphur grades, could hit 6.5 million tons in March, rising from about 5 million tons in February, based on latest assessments by LSEG Oil Research.

OTHER NEWS

– Oil prices extended last week’s losses on Monday on concerns over slow demand in China, although lingering geopolitical risk surrounding the Middle East and Russia limited the decline.

– Saudi Aramco plans to meet full contractual crude oil volumes to most Asian buyers in April, but will reduce supply of heavier oil to Chinese and Indian customers due to oilfield maintenance, sources with knowledge of the matter said.

– Tank storage firm Vopak said on Monday that it has signed an agreement with industrial gas company Air Liquide to develop and operate infrastructure for ammonia import, cracking and hydrogen distribution in Singapore.

– Resource-scarce Japan is shoring up long-term supplies of liquefied natural gas from close allies Australia and the United States as key contracts from providers including Russia are set to expire by the early 2030s.

WINDOW TRADES

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

Source: Reuters reported by Jeslyn Lerh and editing by Sonia Cheema