Asia’s benchmarks for Very Low Sulphur Fuel Oil (VLSFO) logged weekly declines as of Friday, a sign that the market has started to pare back following its recent rally.
Spot premiums for cargo and marine fuel have both weakened. The drop was steeper in the delivered marine fuel market, with premiums softening to levels near $25 per metric ton this week, compared with premiums above $30 last week, based on trade sources.
The market received support in recent weeks on the back of tighter sulphur-cutter stocks and blending components, though prospects of a recovery in broader supply is expected to pare the strength away into the fourth quarter, sources said.
Refining margins have also declined this week, with October cracks for VLSFO closing at premiums of $11.22 on Friday, logging a slide of about 20% week-on-week, based on LSEG’s data.
The VLSFO margin has softened after breaching $14.50 last week, which was a six-month high.
As for High Sulphur Fuel Oil (HSFO), the market has remained largely supported for late-September loadings this week, though showing signs of weakening for October loadings.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shreya Biswas)
