Spot premiums for high sulphur fuel oil (HSFO) soared on Monday, supported by a flurry of strong bids for the second half of March.

The recent rally has also drawn an interest to bids from some trade participants who rarely appear on the physical window.

Cargo arrivals to Asia for March are expected to be ample, though some sellers are holding back from offering HSFO in the open market as they hold out for expectations of even higher prices in the coming weeks, market sources said.

Singapore 380-cst HSFO cash premium was pegged near $20 a metric ton on Monday, hitting its highest in more than one and a half years, based on Reuters data.

In contrast, the spot market for very low sulphur fuel oil (VLSFO) was reflective of bearish fundamentals, with higher supply and tepid demand being eyed.

The VLSFO cash differential was pegged lower at a very narrow premium, nearing parity to cargo quotes.

Meanwhile, fuel oil margins slipped at the prompt months. April VLSFO cracks traded below premiums of $8.75 a barrel, based on LSEG data, while cracks for 380-cst HSFO closed in discounts.

The spot market for VLSFO is expected to stay at downside risk, while HSFO will likely retain strength into the month, said market sources.

OTHER NEWS

– Oil edged up on Monday as upbeat manufacturing data from China, the world’s biggest crude importer, led to renewed optimism for fuel demand, although uncertainty about a Ukraine peace deal and global economic growth from potential U.S. tariffs loomed.

– Russian oil product exports from the Black Sea port of Tuapse are set to fall to 798,000 metric tons in March, down 9.8% on a daily basis from the 799,000 tons scheduled for February, two traders said on Monday.

– Indonesia’s state-owned energy company Pertamina on Monday publicly apologised and pledged to improve the firm’s governance after five executives at its units were arrested over alleged corruption involving oil imports.

– Shell is considering a potential sale of its chemicals assets in Europe and the United States, the Wall Street Journal reported on Sunday, citing sources familiar with the matter.

Source: Reuters