Asia’s very low Sulphur fuel oil (VLSFO) showed signs of further easing on Thursday as backwardation narrowed at the prompt months, though high Sulphur fuel oil (HSFO) held on to its recent strength.
Spot activity was thin for VLSFO amid scant offers, while bids also retreated to lower values.
Backwardation for the VLSFO balance-September and October time spread narrowed further to $18.75 per metric ton, paring back after hitting its widest level since November 2023 as of last week.
Meanwhile, the HSFO market continued to hold onto its recent strength, though some trade sources said this is expected to be short-lived. Supplies to Asia are expected to recover as the Middle East exits its peak summer demand period, the sources said.
Spot 380-cst HSFO traded at a strong premium for loading dates in late September, though lower offers emerged for dates in October.
In Singapore landed storage, the volume of fuel oil fell to its lowest in 16 weeks.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala)
