Asia’s spot differential for very low sulphur fuel oil (VLSFO) softened back into a discount as of Tuesday, as competitive offers weighed on the market for prompt loading dates.

The differential held in thin premiums over cargo benchmark quotes for a week before sliding back into discounts.

Meanwhile, Asia’s high sulphur fuel oil (HSFO) market was little changed on Tuesday, though 180-cst HSFO continued to trade at a discount.

Despite the downside in physical markets, key product cracks traded higher from the previous day.

Singapore’s VLSFO crack for November (LFO05SGBRTCMc1) closed at a premium of $7.95 a barrel, while the crack for 380-cst HSFO (FO380BRTCKMc1) rose to a discount of $3.55 a barrel, data compiled by LSEG showed.

REFINERY UPDATES

– The Kirishi oil refinery, one of Russia’s largest, has halted its most productive crude distillation unit, CDU-6, following a drone attack and subsequent fire on October 4, with recovery expected to take about a month, two industry sources said on Monday.

OTHER NEWS

– Oil rose more than 1% on Monday after OPEC+’s planned production increase for November was more modest than expected, tempering some concerns about supply additions, though a soft outlook for demand is likely to cap near-term gains.
– China is adding eleven new oil reserve sites this year and next as Beijing accelerates stockpiling the strategic commodity to safeguard supply security, according to public sources reviewed by Reuters.
– There is enough supply of Russian oil for Indian refiners in the market as Ukraine’s attacks on Russia’s energy facilities have reduced its refining capacity and made more crude available, a government official told Reuters.
– Shell expects a $600 million hit in the third quarter from abandoning its biofuels project in Rotterdam, it said on Tuesday while flagging higher liquefied natural gas production and better gas trading results.

WINDOW TRADES

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