VLSFO premium dips for third straight day, cracks post weekly losses

Asia's spot cash premium for very low sulphur fuel oil (VLSFO) dipped for a third straight session on Friday amid selling interest, while refining cracks posted weekly declines despite lower crude oil prices week-on-week.

The 0.5% VLSFO cash differential fell by over $2 day-on-day to a premium of $15.70 a tonne to Singapore quotes, with three trades emerging on Friday.

Front-month January cracks for VLSFO (LFO05SGDUBCMc1) posted weekly declines of more than 6%, down at $10.88 a barrel to Dubai quotes at Friday's Asia close (0830 GMT).

The high sulphur fuel oil (HSFO) market has also come under pressure amid expectations of more incoming supplies.

The 380-cst HSFO cash differential (FO380-SIN-DIF) fell by 77 cents to a thin premium of 15 cents a tonne on Friday, while the 180-cst HSFO cash differential (FO180-SIN-DIF) ended the week in discounts.

ARA INVENTORIES (STK-FO-ARA)

Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub climbed by 7% week-on-week to 1.08 million tonnes in the week ended Dec. 8, latest data from Dutch consultancy Insights Global showed.

OTHER NEWS

- Oil prices bounced higher in Asia trade on Friday as closure of a major Canada-to-U.S. crude pipeline disrupted supplies, but both benchmarks were headed for a weekly loss on worries over slowing global demand growth.

- December oil loadings from Russia's Black Sea port of Novorossiisk are behind schedule due to storms, while bad weather also prevented two vessels which arrived last month from loading before a Dec. 5 price cap kicked in, market sources said.

- Port operator PSA International, fully owned by Singapore state investor Temasek Holdings, is considering selling its multi-billion dollar, 20% stake in the ports business of CK Hutchison Holdings, two sources familiar with the matter told Reuters.

- The two largest U.S. oil companies - Exxon Mobil Corp and Chevron Corp - disclosed plans to increase outlays on energy projects next year amid high oil demand and prices.

WINDOW TRADES

- 180-cst HSFO: No trade

- 380-cst HSFO: One trade

- 0.5% VLSFO: Three trades

ASSESSMENTS