Asia Fuel Oil-VLSFO refining margins rise further on tight supplies

Refining margins for very low sulphur fuel oil (VLSFO) extended gains on Tuesday amid persisting tight supplies, market participants said.

Singapore’s December 0.5% VLSFO crack closed at a premium of $13.94 a barrel, up from $12.85 on Friday, LSEG data showed. Markets were closed on Monday on account of a public holiday.

The term tender from Kuwait’s Al Zour refinery raised market expectations that stockpiling at the Doha and Al-Zour power plants will last until at least December, which will keep VLSFO exports from the Al-Zour refinery low, analysts at energy consultancy FGE said in a client note.

Cash premium for 0.5% VLSFO inched lower to $29.50 a metric ton on Tuesday from $29.75 in the earlier session.

In tenders, Bangladesh Petroleum Corp (BPC) sought 200,000-275,000 metric tons of 180-cst high sulphur fuel oil for delivery between January and June 2024, a tender document on the country’s government website showed on Tuesday.

The tender closes on Nov. 16, with validity of up to Jan. 31 next year.

OTHER NEWS

– Indonesia’s state energy company Pertamina and U.S. oil majors Exxon Mobil XOM.N and Chevron CVX.N are moving ahead with their discussions to invest in carbon capture facilities while Exxon eyes a petrochemical project in the country.

– The Kremlin said on Tuesday that Russia was acting in its own interests when asked about a probe by the United States into alleged violations of Western oil sanctions on Moscow.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: One trade
Source: Reuters (Reporting by Mohi Narayan; Editing by Arun Koyyur)