Spot premium for very low sulphur fuel oil (VLSFO) extended declines on Wednesday, with steady-to-higher supplies expected to hit the market this month.

Singapore’s VLSFO cash premium fell below $6 a metric ton, with backwardation narrowing further day-on-day.

Cracks for the product traded down to premiums of about $10.60 a barrel, according to LSEG data. (LFO05SGBRTCMc1)

The market was eyeing ample supply for this month, with steady-to-higher cargoes expected compared to last month, based on ship-tracking data calculations.

Nigeria’s Dangote offered 130,000 tons of low-sulphur straight run fuel for loading in end-July, via a tender that closes on Wednesday, trade sources said.

Meanwhile, high sulphur fuel oil (HSFO) logged mild gains, with 180-cst fuel trading at firmer levels, though 380-cst fuel remained pressured.

HSFO cracks for 380-cst fuel (FO380BRTCKMc1) closed at discounts wider than $2 a barrel on Wednesday.

REFINERY UPDATES

– Britain’s insolvent Lindsey oil refinery has resumed fuel deliveries, a spokesperson for the Department for Energy Security and Net Zero told Reuters on Tuesday, after a deal to continue short-term crude supply was reached last week.

OTHER NEWS

– Oil prices climbed on Wednesday, maintaining their highest levels since June 23, lifted by attacks on shipping in the Red Sea, along with concerns over steep U.S. tariffs on copper and a forecast for lower U.S. oil production.
– Oil markets are absorbing OPEC+ production increases without building inventories, which means they are thirsty for more oil, United Arab Emirates’ Energy Minister Suhail al-Mazrouei said on Wednesday.
– – A mission was underway on Wednesday to rescue the crew from the Eternity C cargo ship, which sank in the Red Sea following an attack that killed at least four crew members.
– Ecuador’s OCP heavy crude pipeline suspended pumping on Monday, just hours after resuming operations, as a precaution due to the erosion of the Quijos river, the company said in a statement on Tuesday.

WINDOW TRADES

– 180-cst HSFO: Two trades
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters