MANILA: Asia’s 0.5% very low sulphur fuel oil (VLSFO) market is expected to retain strength into the new trading week amid tight arbitrage supply and firm downstream bunkering demand.

Cash premiums for 0.5% VLSFO climbed for a fourth consecutive day to $70.04 per tonne to Singapore quotes on Monday, marking a fresh all-time high.

The uptrend is expected to continue into June as supply replenishment is slated to remain tight in the coming weeks, with less arbitrage supply flowing out of the West due to firm domestic demand in the region.

Meanwhile, cash differentials for high-sulphur fuel oil (HSFO) sank into further discounts as consistent supply is expected to arrive from the Middle East and Russia. 180-cst HSFO cash differentials fell to a discount of $2 per tonne to Singapore quotes on Monday, versus a premium of 1 cent per tonne on Friday.

Ex-wharf bunkering premiums for 380cst HSFO fell further to about $3 per tonne to Singapore quotes on Monday, versus about $5 per tonne last week. Oil prices rose on Monday, hitting their highest in more than two months, as traders waited to see whether a planned European Union meeting would reach an agreement on banning Russian oil imports. - Iranian authorities have seized a vessel carrying 106,500 litres of smuggled fuel and arrested nine crew members, the semi-official Tasnim news agency reported on Monday.