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Asia Fuel Oil-VLSFO weakens; Kuwait Al Zour offers April supply

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Asia’s very low sulphur fuel oil (VLSFO) market softened on Tuesday, with Kuwait’s Al Zour refinery slated to close a supply tender for April, trade sources said.

Al Zour offered a VLSFO cargo for loading between April 4 and 5 in a tender that closes on Tuesday, sources said. The cargo comprises 120,000 metric tons of VLSFO.

Singapore’s spot differentials for VLSFO fell to premiums below $1.50 a ton on Tuesday, while cracks LFO05SGDUBCMc1 dipped slightly below premiums of $12 a barrel.

High sulphur fuel oil (HSFO) benchmarks also weakened as plentiful supplies prevailed.

The cash differential for 380-cst HSFO weakened to a discount of $2.95 a ton, while cracks FO380DUBCKMc1 softened to discounts of $10.50 to $11 a barrel.

Meanwhile, the spot discount of 180-cst HSFO FO180-SIN-DIF also continued to widen amid the presence of a competitive offer.


Fuel oil supplies to East Asia held above 6.5 million tons for March, compared to just about 5 million tons in February, calculations based on LSEG ship-tracking data showed Tuesday.

The surge was led by an influx in Russian barrels, while arrivals from the Middle East and the U.S. also edged higher, the data showed.


– Oil prices were largely steady on Tuesday near four-month highs after breaking above range-bound trading last week, but the prospect of rising exports from Russia weighed amid Ukrainian attacks on refineries.

– Russia will increase oil exports through its western ports in March by almost 200,000 barrels per day against the monthly plan to 2.15 million bpd, and market participants expect a further increase in exports amid ongoing drone attacks on Russian refineries.

– Iraq will reduce its crude exports to 3.3 million barrels a day in the coming months to compensate for exceeding its OPEC+ quota since January, the oil ministry said on Monday, a pledge that would cut shipments by 130,000 bpd from last month.

– U.S. crude oil stockpiles in the Strategic Petroleum Reserve at year-end will be at or exceeding the level prior to a massive 180 million barrel sale two years ago, U.S. Energy Secretary Jennifer Granholm said.


– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala)