VLSFO extends slide as bearish fundamentals weigh

Asia's very low sulphur fuel oil (VLSFO) market softened further on Wednesday, with supply pressure and tepid demand underpinning the market.

The product's cash differential inched nearer towards parity from cargo quotes, on the verge of discounts, based on market indications.

Meanwhile, spot high sulphur fuel oil (HSFO) continued to trade steadily in discounts to cargo quotes, though market structure recovered slightly at the prompt months.

In tenders, India's HPCL offered three cargoes of HSFO for loading between late August and early September, based on industry sources. The tender closes on Thursday.

Refining cracks were rangebound from the previous session. Singapore 380-cst HSFO crack closed at a discount of about $3.50 a barrel, while VLSFO crack was steady at a premium of $9.35 a barrel, showed Dubai-basis values from LSEG on Wednesday.

INVENTORY DATA

- Fujairah heavy fuel inventories (FUJHD04) rose 21.7% to 9.66 million barrels (1.52 million tons) in the week to Aug. 4, FOIZ data published by S&P Global Commodity Insights showed.

OTHER NEWS

- Oil prices climbed on Wednesday, in response to concerns over potential supply disruptions after U.S. President Donald Trump threatened India with higher tariffs over its Russian crude purchases.

- Indian Oil Corp has bought one million barrels of Nigeria's Agbami crude oil for September delivery, trade sources said on Wednesday.

- Nigeria's Dangote oil refinery is planning a 15-day maintenance shutdown of its gasoline-making RFCC unit, tentatively starting on August 10, according to a note from industry monitor IIR seen by Reuters.

- Saudi Arabian oil company Aramco reported a 22% drop in second-quarter profit on Tuesday, mainly on lower revenue, while it racked up more debt.

WINDOW TRADES

- 180-cst HSFO: Two trades

- 380-cst HSFO: One trade

- 0.5% VLSFO: No trade

ASSESSMENTS