Asia Fuel Oil-Low-sulphur fuel holds firm despite weaker gasoil market

SINGAPORE, July 15 (Reuters) - Cash premiums for very low sulphur fuel oil (VLSFO) in Asia rose more than 10% since the start of the month, despite signs of a weakening gasoil market. A shortage in gasoil and distillate components for the fuel oil blending pool have kept the VLSFO market tight in recent months, buoying cash premiums to record highs. The 0.5% VLSFO cash differential fell $2.85 to a premium of $83.38 per tonne to Singapore quotes on Friday, retreating from a record high hit the previous day but still remaining well above last month's average value of $70 per tonne. However, fuel oil traders said a downward price correction is possible, as more arbitrage supplies are expected to arrive from the second half of July into August. Meanwhile, high sulphur fuel oil (HSFO) was steady in discounts this week as supplies remained ample to meet demand. The 380-cst HSFO cash differential was stable day-on-day at a discount of $2.33 per tonne to Singapore quotes on Friday. TENDER UPDATES Pakistan State Oil (PSO) bought two 65,000-tonne 180-cst HSFO cargoes for delivery in the first half of August, at premiums of $77 and $78 per tonne over Arab Gulf quotes, market sources said. PSO had earlier sought for three HSFO cargoes and two LSFO cargoes for this tender. It received three HSFO offers and one LSFO offer from Coral Energy, a document on PSO's website showed. PSO decided to pick up two HSFO cargoes out of the above, according to market sources. ARA INVENTORIES Fuel oil inventories in the ARA refining and storage fell for a fourth straight week to a six-week low of 1.11 million tonnes, in the week ended July 14, latest data from Dutch consultancy Insights Global showed. OTHER NEWS - Oil prices rose on Friday amid prospects of a less aggressive U.S. rate hike, although worries about a recovery in demand capped gains. - Saudi Arabia, the world's largest oil exporter, more than doubled the amount of Russian fuel oil it imported in the second quarter to feed power stations to meet summer cooling demand and free up the kingdom's own crude for export, data showed and traders said. - Pakistan on Thursday night announced a decrease in fuel prices to pass on a drop in global prices to inflation-hit consumers. - China's refinery throughput for the six months ended June marked the first annual decline for the period since at least 2011, data showed on Friday, as strict COVID-19 restrictions and fuel export curbs dampened production. - Marine and energy equipment maker Wartsila will roll out its first methanol-powered engine in a new ship next year as the group accelerates green fuel technology options for shipping, a company executive said. WINDOW TRADES - HSFO: No trades - VLSFO: Two 0.5% trades ASSESSMENTS FUEL OIL CASH ($/T) ASIA CLOSE CHANGE PREV RIC CLOSE Cargo - 0.5% VLSFO 865.01 -6.99 872 Diff - 0.5% VLSFO 83.38 -2.85 86.23 Cargo - 180cst 465.99 -0.71 466.70 Diff - 180cst -0.15 0.00 -0.15 Cargo - 380cst 424.38 -3.97 428.35 Diff - 380cst -2.33 0.00 -2.33 Bunker (Ex-wharf) Premium - 380cst 5.62 0.37 5.25 Bunker (Ex-wharf) Premium - 0.5% VLSFO 93.00 -2.00 95.00 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 Sherry Jacob-Phillips)