Asia Fuel Oil-380cst-HSFO/0.5%-VLSFO spread narrows 7% in July

SINGAPORE, July 29 (Reuters) - The HiLo fuel oil spread, which is the price difference between front-month 0.5% very low sulphur fuel oil (VLSFO) and 380-cst high-sulphur fuel oil (HSFO) swaps, narrowed 7% throughout July after striking a record high in end-June, Refinitiv data showed. This was led by a softening low-sulphur fuel market in the second half of the month, with its cash differentials sliding sharply towards two-month lows by the end of July on prospects of higher supply replenishment into August. The 0.5% VLSFO cash differential climbed 8 cents to a premium of $48.38 per tonne over Singapore quotes on Friday, steadying after declining for eight straight sessions. In contrast, the 380-cst HSFO cash differential staged a recovery towards two-month highs this week, climbing to a premium of $5.66 per tonne over Singapore quotes on Friday. HSFO differentials have hovered in discounts to slight premiums for most of the month, though front-month margins remained near multi-year lows, reflecting weak supply-demand fundamentals in the longer term. TENDER UPDATES Pakistan's PSO has issued tenders to purchase fuel oil for October delivery, after having consistently sought supplies in the past three months to meet power generation demand. The company is seeking four fuel oil cargoes in its latest tenders, including one HSFO and one LSFO cargo for the first half of October, and another HSFO and LSFO cargo for the second half of October, documents on its website showed. Pakistan posted record monthly highs for imports and petroleum-related purchases in June, central bank data showed on Wednesday, as the country battled to avert a full-blown economic crisis. ARA INVENTORIES Fuel oil inventories in the ARA refining and storage hub fell 3% to 1.13 million tonnes in the week ended July 28, latest data from Dutch consultancy Insights Global showed. OTHER NEWS - Oil prices traded sideways on Friday, lifted by supply concerns as attention turns to the next meeting between OPEC and its allies, though fears of recession capped gains. - China's Sinopec Corp 0386.HK announced a string of deals with UK-based chemical and energy group INEOS including the sale of a 50% stake in Shanghai SECCO Petrochemical for 10.5 billion yuan ($1.56 billion). - The Abu Dhabi National Oil Company (ADNOC) said it had shut down its operations at Fujairah terminal due to "exceptional rainfall." WINDOW TRADES - HSFO: One 380-cst trade - VLSFO: No trade ASSESSMENTS FUEL OIL CASH ($/T) ASIA CLOSE CHANGE PREV CLOSE RIC Cargo - 0.5% VLSFO 802.24 -10.78 813.02 Diff - 0.5% VLSFO 48.38 0.08 48.3 Cargo - 180cst 512.48 -0.58 513.06 Diff - 180cst 1.52 0.35 1.17 Cargo - 380cst 478.59 1.05 477.54 Diff - 380cst 5.66 2.06 3.60 Bunker (Ex-wharf) Premium - 380cst 6.41 -0.40 6.81 Bunker (Ex-wharf) Premium - 0.5% VLSFO 70.00 -5.00 75.00 For a list of derivatives prices, including margins, please double click the RICs below. Brent M1 180cst M1 180cst M1/M2 180cst M2 Visco M1 Visco M2 380cst M1 380cst M1/M2 380cst M2 Cracks 180-Dubai M1 Cracks 180-Dubai M2 East-West M1 East-West M2 Barges M1 Barges M1/M2 Barges M2 Crack Barges-Brent M1 Crack Barges-Brent M2 (Reporting by Jeslyn Lerh; Editing by Shailesh Kuber)