SINGAPORE: Asia’s 0.5% very low sulphur fuel oil (VLSFO) premiums rose for a sixth straight session on Wednesday as tight supply and steady downstream bunkering demand supported gains.

Cash differentials for 0.5% VLSFO climbed to a new all-time high of $76.72 per tonne to Singapore quotes, Reuters data showed.

Downstream delivered bunker premiums for 0.5% VLSFO were also hovering above record highs of $100 per tonne to Singapore quotes amid the supply crunch, according to market sources.

Bunker prices also retained support amid firmer upstream crude prices, after the EU agreed to a partial and phased ban on Russian oil earlier this week. In contrast, high sulphur fuel oil differentials remained in discounts amid more inflows expected from the Middle East and Russia in the coming weeks.

The 180cst-HSFO cash differential fell to a discount of $5.89 per tonne to Singapore quotes on Wednesday, hitting a two-year low. Growing seasonal summer demand from South Asia had failed to lift prices in the HSFO market, as this was outweighed by the expectations of more supply, sources said.

Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues dipped 1% from the previous week to 10.84 million barrels (1.71 million tonnes) in the week ended May 30, data via S&P Global Commodity Insights showed on Wednesday.

Oil prices firmed on Wednesday after European Union leaders agreed to a partial and phased ban on Russian oil and as China ended its COVID-19 lockdown in Shanghai. Iran urged Greece on Tuesday to cooperate to resolve a crisis over the seizure of ships without involving the United States, after Iranian forces seized two Greek tankers in the Gulf following the seizure of an Iranian vessel off Greece.