The cash premium for very low sulphur fuel oil (VLSFO) steadied on Tuesday after softening a day earlier, though the market’s front-month backwardation widened.

Kuwait’s latest spot tender for a cargo loading in early May has been awarded to Aramco, at a discount of about $9 a metric ton to VLSFO quotes and likely to land in Fujairah, trade sources said.

This means that Asia is unlikely to receive more supplies from Kuwait in May, though sources said that the broader supply pool remains ample.

Spot VLSFO premium was pegged at $2.25 a ton on Tuesday, while front-month cracks LFO05SGDUBCMc1 closed at premiums of $11.75 a barrel, based on LSEG data.

Meanwhile, the May/June intermonth spread widened to a backwardation of about $5.50 a ton at the Asia close, up from $4.75 in the previous day.

OTHER NEWS

– Oil prices gained on Tuesday after stronger economic data out of Europe, as investors also weighed the potential fallout from any fresh U.S. sanctions on Iran’s oil exports with tensions remaining high in the Middle East.

– The UAE and Oman have established an investment partnership worth 129 billion UAE dirham ($35.12 billion) to deepen cooperation across multiple sectors including renewable energy, the UAE’s ministry of investment said on Tuesday.

– European diesel futures spreads are flashing signs of oversupply and slow demand with the three-month contango LGOc1-LGOc4 trading on Monday at its widest since August 2021.

– Japan’s Mitsui & Co said on Tuesday nothing has been decided on a liquefied natural gas project in the United Arab Emirates, after the Nikkei reported it was teaming up with Abu Dhabi National Oil Company on it.

Source: Reuters reported by Jeslyn Lerh and edited by Mrigank Dhaniwala