Asia fuel oil benchmarks were mostly rangebound on Tuesday in the absence of fresh drivers, though the contango for high sulphur fuel oil (HSFO) markets narrowed from the previous session.

The market structure for both 180-cst and 380-cst HSFO has shown some recovery in recent days, though the short term still appears to be adequately supplied, according to market sources.

Cash differentials for HSFO remained stuck in discounts as of Tuesday, with bids and offers rangebound.

Meanwhile, very low sulphur fuel oil (VLSFO) maintained a small cash premium in quiet trade, though cracks slipped. The VLSFO February crack (LFO05SGBRTCMc1) closed at a premium of $3.40 a barrel on Tuesday, data by LSEG showed.

Separately, 380-cst HSFO crack also closed lower, sliding to a discount near $6.80 a barrel.

REFINERY UPDATES

– China’s Hengyi Petrochemical said it will proceed with the second phase of its refinery and petrochemical project in Brunei, which is expected to be completed by the end of 2028.

– U.S. refiner Phillips 66 said it had agreed to acquire the assets and infrastructure of Lindsey Oil Refinery in northern England following the site’s liquidation, and will integrate the key facilities into its Humber Refinery.

OTHER NEWS

– Oil prices fell on Tuesday on expectations of ample global supply amid weak demand, and as the market weighed the prospect of higher Venezuelan crude output following the U.S. capture of President Nicolas Maduro.

– About a dozen oil tankers loaded with Venezuelan crude and fuel have left the country’s waters since the start of the year in apparent defiance of the U.S. government’s blockade on exports, according to documents seen by Reuters and industry sources including monitoring service TankerTrackers.com.

– Reliance Industries said on Tuesday it is not expecting any Russian crude oil deliveries in January, a move that could sharply cut India’s Russian oil imports during the month to the lowest in years.

– Utility Vistra said it has agreed to buy Cogentrix Energy, comprising 10 natural gas-fired power plants, from Quantum Capital Group for about $4.7 billion, as it looks to meet growing power demand.

WINDOW TRADES

– 180-cst HSFO: No trade

– 380-cst HSFO: No trade

– 0.5% VLSFO: No trade
Source: Reuters