Asia's very low sulphur fuel oil (VLSFO) market pared strength on Friday, with both cargo and bunker premiums retreating, as market sources anticipated fresh supply arrivals.

Spot offers for VLSFO edged lower into later dates of July, while the market structure traded into narrower backwardation at the prompt months.

Downstream bunker premiums for VLSFO also eased towards the end of the week after surging last week, though they remained elevated at about $100 a metric ton over cargo quotes on a delivered Singapore basis.

Meanwhile, 380-cst high sulphur fuel oil (HSFO) steadied on Friday after recent declines. The prompt market structure also firmed slightly, though it remained in contango.

Cracks were mixed for the two fuel grades. The VLSFO crack (LFO05SGBRTCMc1) eased to a premium of $12.55 a barrel on Friday, while the 380-cst HSFO crack (FO380BRTCKMc1) climbed to a discount near $6.25 a barrel, LSEG data showed.

INVENTORY DATA

- Fuel oil inventories in the ARA hub (STK-FO-ARA) dipped 0.4% to 751,000 tons in the week to July 2, according to Dutch consultancy Insights Global.

OTHER NEWS

- Oil prices were little changed on Friday before a long holiday weekend in the U.S., as traders held on to hopes that attempts to secure peace in the Middle East between the United States and Iran would succeed.

- Kuwait's crude oil production rose sharply to 1.65 million barrels per day in June from 580,000 bpd in May, a source familiar with the matter told Reuters on Thursday, as the OPEC member boosts exports through the Gulf following the U.S.-Iran interim peace agreement.

- Europe is taking tougher action against tankers falsely using Cameroon's flag registry to transport Russian oil, including boarding vessels at sea, prompting Cameroon to dump 39 such vessels from its ship registry, according to officials and documents.

- Traders have sold gasoline produced by Indian refiner Nayara Energy to Russia, which is grappling with fuel shortages triggered by Ukrainian attacks on its energy infrastructure, two sources with direct knowledge of the matter said.

WINDOW TRADES

- 180-cst HSFO: No trade.

- 380-cst HSFO: Two trades.

- 0.5% VLSFO: No trade.

ASSESSMENTS

FUEL OIL

CASH ($/T)

ASIA CLOSE

CHANGE

PREV CLOSE

RIC

Cargo - 180cst

428.04

-0.73

428.77

(FO180-SIN)

Diff - 180cst

-1.21

-3.40

2.19

(FO180-SIN-DIF)

Cargo - 380cst

413.26

6.86

406.40

(FO380-SIN)

Diff - 380cst

-0.42

1.27

-1.69

(FO380-SIN-DIF)

Cargo - 0.5% VLSFO

561.61

-9.64

571.25

(MFO05-SIN)

Diff - 0.5% VLSFO

15.21

-3.78

18.98

(MFO05-SIN-DIF)

For a list of derivatives prices, please refer to ENSWAP/INFO or the RICs below:

180cst M1

(FO180SGSWMc1)

180cst M1/M2

(FO180SGSDMc1)

380cst M1

(FO380SGSWMc1)

380cst M1/M2

(FO380SGSDMc1)

0.5% VLSFO M1

(LFO05FSGMc1)

0.5% VLSFO M1/M2

(LFO05FSGSMc1)

Cracks 180cst-Brent M1

(FO180BRTCKMc1)

Cracks 180cst-Dubai M1

(FO180SGCKMc1)

Cracks 380cst-Brent M1

(FO380BRTCKMc1)

Cracks 380cst-Dubai M1

(FO380DUBCKMc1)

Cracks 0.5% VLSFO-Brent M1

(LFO05SGBRTCMc1)

Cracks 0.5% VLSFO-Dubai M1

(LFO05SGDUBCMc1)

Visco 180cst/380cst M1

(FOVISSGDFMc1)

Hi-5 0.5% VLSFO/380cst M1

(FO05-380SGMc1)

GoFo 10PPM/0.5% VLSFO M1

(GO10FO05FSGMc1)

East-West M1

(FOSGEWMc1)

Barges M1

(HFOFARAAMc1)

Barges M1/M2

(HFOFARAASMc1)

Crack Barges-Brent M1

(HFOFARAACMc1)