SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack fell to a one-month low on Wednesday as benchmark crude oil prices were steady by the end of Asia trading hours.

The front-month VLSFO crack was at $11.19 a barrel above Dubai crude, down from $11.60 a barrel on Tuesday and its lowest since May 31, Refinitiv data in Eikon showed.

Oil prices were broadly steady on Wednesday, heading for monthly and quarterly gains, after some data suggested US crude stockpiles were shrinking while an OPEC report warned of a possibly significant glut building by the end of next year.

Sluggish bunkering demand and steady imports are expected to keep the VLSFO market pressured over the near term as supplies in the Singapore hub remain plentiful, trade sources said.

Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub dropped 8% to an 11-week low in the week ended June 28, data released on Wednesday showed.

The lower inventories came amid steady bunkering demand in the Fujairah hub and firm export volumes to regional neighbours and Asia, trade sources said.

Compared to last year, Fujairah’s fuel oil inventories were 28% lower.

According to assessments by Refinitiv Oil Research, exports from the UAE were at 512,000 tonnes in the week ended June 27, similar to the prior week’s volumes.

Refinitiv Oil Research added that the Fujairah inventories fell as “fuel oil imports to the trading and storage hub failed to keep pace”.

Pakistan’s PSO bought three fuel oil cargoes totalling 165,000 tonnes for delivery in July, trade sources said.

PSO bought a 65,000-tonne 180-cst HSFO cargo with a maximum 3.5% sulphur content from Vitol at a premium of about $47 per tonne to Middle East quotes on a cost-and-freight (CFR) basis and for delivery over July 12-14.

PSO also bought two 50,000-tonne cargoes of 170-cst low-sulphur fuel oil with a maximum 0.95% sulphur content, one for July 7-15 delivery from Vitol at a $175.88 per tonne premium to Middle East quotes on a CFR basis and the second from BB Energy for July 16-27 delivery at a $129.50 per tonne premium.

Pakistan’s PSO, which last imported fuel oil cargoes in May, also has an outstanding tender for 65,000 tonnes of 180-cst HSFO for July 21-29 delivery in a tender closing on June 30 with one week’s validity.