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Asia Fuel Oil-HSFO rebounds as market eyes China demand recovery

Asia’s high sulphur fuel oil (HSFO) market firmed on Tuesday amid market expectations of China resuming more purchases, following the recent release of fresh import quotas.

Spot discounts for 380-cst HSFO FO380-SIN-DIF narrowed to $2.59 a barrel, while margins FO380DUBCKMc1 edged higher to discounts of $11.21 a barrel.
China has been aggressively importing HSFO barrels in the first half of the year, before pulling back purchases in the third quarter after some refiners ran out of quotas.

The new quotas issued on Monday are expected to raise buying again, according to industry sources.

Meanwhile, the very low sulphur fuel oil (VLSFO) market continued to extend a downtrend.

Singapore’s 0.5% VLSFO cash premium MFO05-SIN-DIF tumbled to $12.25 a metric ton on Tuesday, while refining crack for LFO05SGDUBCMc1 was little changed at a premium of about $11 a barrel.

In tenders, India’s HPCL offered fuel oil for loading in December and early January, sources said.

– Oil prices rose on Tuesday, supported by expectations that the OPEC+ producer group may deepen and extend output cuts due to concern over softer global demand.

– Russia has increased daily crude oil processing by almost 5% in the first three weeks of November from October’s average level, raising its output of gasoline and diesel, on which an export ban has been lifted, sources told Reuters on Tuesday.

– Brazilian state-run oil company Petrobras said the contract for the sale of its LUBNOR refinery in northeastern Brazil has been terminated, while would-be buyer Grepar said it would take legal action against the oil giant.

– Shipments of liquefied natural gas from Australia Pacific LNG have come to a halt after a loaded tanker docked at the site lost power, operator ConocoPhillips and co-owner Origin Energy said on Tuesday.

– 180-cst HSFO: No trade
– 380-cst HSFO: Three trades
– 0.5% VLSFO: Two trades
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Krishna Chandra Eluri)

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