Asia’s very low sulphur fuel oil (VLSFO) market traded within range-bound discounts on Monday, as bearish market fundamentals continued to limit recovery in prices.

Several trades for VLSFO emerged in discounts ranging between 25 cents and 50 cents to cargo quotes for prompt loadings. The market had slipped back into a discounted differential as of last week.

Prompt derivative spreads continued to trade in a contango structure for both VLSFO as well as high sulphur fuel oil (HSFO) contracts, which have seen plentiful selling interest.

India’s HPCL offered 33,000 tons of HSFO for loading from Vizag in late December, via a tender that closes on Tuesday, based on data from market sources.

Cracks bounced slightly higher day-on-day. VLSFO’s crack (LFO05SGBRTCMc1) was steady to firmer at a premium of about $3.70 a barrel, while 380-cst HSFO’s crack (FO380BRTCKMc1) rose to a discount near $7.75 a barrel, data compiled by LSEG showed.

OTHER NEWS

– Oil prices hovered at two-week highs on Monday as investors expect a likely U.S. Federal Reserve interest rate cut this week to lift economic growth and energy demand, while monitoring geopolitical risk that threatens Russian and Venezuelan supply.
– China’s crude oil imports rose 4.88% in November from a year earlier, government data released on Monday showed, with daily import volumes reaching the highest level since August 2023.
– India’s fuel consumption climbed to a six-month high in November, rising 5.5% from October to 21.27 million metric tons, according to data from the oil ministry.
– The Group of Seven countries and the European Union are in talks to replace a price cap on Russian oil exports with a full maritime services ban in a bid to reduce the oil revenue that helps finance Russia’s war in Ukraine, six sources familiar with the matter said.

WINDOW TRADES

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