Spot differential for Asia very low sulphur fuel oil (VLSFO) flipped to a premium on Monday, with markets showing some recovery into late January and early February, while more regional supply tenders closed.

Singapore’s VLSFO cash differential was pegged at a premium of 25 cents, after hovering in a discount since early December. Bids from a major trading house emerged at parity with cargo quotes on Monday, though trade remained muted.

Meanwhile, high sulphur fuel oil (HSFO) saw more trades emerging, with cash differentials logging smaller discounts compared to the previous session.
In the broader market, some regional supply tenders for January loadings closed on Monday, based on data from market sources.
India’s HPCL offered 33,000 tons of HSFO for loading between January 25 and 27. Meanwhile, Vietnam’s Nghi Son offered 10,000 tons of fuel oil for loading between January 12 and 14.

Separately, Indonesia’s Pertamina also offered residual fuel cargoes for loading in January, mostly comprising low-sulphur waxy residue.

Cracks inched higher from the previous week after crude prices fell. VLSFO cracks (LFO05SGBRTCMc1) closed at premiums near $4 a barrel, while 380-cst HSFO cracks (FO380BRTCKMc1) were at discounts near $6.50 a barrel, data compiled by LSEG showed.

REFINERY UPDATES

– Venezuela’s state-run oil company PDVSA has begun cutting crude production because it is running out of storage capacity due to an ongoing U.S. oil blockade.
– Serbia’s Russian-owned NIS oil refinery, which is sanctioned by the United States, will be operational on January 17 or 18 after receiving a temporary licence, President Aleksandar Vucic said on Sunday.

OTHER NEWS

– Oil prices drifted lower on Monday, as adequate global supplies offset concerns about supply disruptions after the United States captured Venezuelan President Nicolas Maduro in an audacious raid over the weekend.
– OPEC+ will likely maintain steady oil output at its meeting on Sunday, three OPEC+ delegates said on Friday, despite political tensions running high between key members Saudi Arabia and the UAE over Yemen.

– India is asking refiners for weekly disclosures of Russian and U.S. oil purchases, people familiar with the matter told Reuters, adding that they expect Russian crude imports to dip below 1 million barrels per day as New Delhi seeks to clinch a trade deal with Washington.
– Egypt and Qatar signed a memorandum of understanding to boost cooperation in LNG sales and imports, including terms for supplying Qatari shipments to Egypt’s Ain Sokhna and Damietta ports, Egypt’s petroleum ministry said on Sunday.

WINDOW TRADES

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