SINGAPORE: The cash premium for very low sulphur fuel oil (VLSFO) extended declines to a two-month low on Tuesday amid expectations of easing supply tightness.

The 0.5% VLSFO cash differential fell for a fifth straight session to a premium of $53.55 per tonne over Singapore quotes on Tuesday.

The VLSFO market has declined sharply since hitting a record high of $86.23 on July 14. Tight supply of blending components had kept the market buoyed from early June to mid-July.

Meanwhile, the high sulphur fuel oil (HSFO) market has hovered between slight premiums to slight discounts for the past trading sessions.

The 180-cst HSFO cash differential inched 19 cents higher to a premium of 4 cents per tonne over Singapore quotes on Tuesday, while the 380-cst HSFO cash differential dipped 2 cents to a premium of $2.90 per tonne over Singapore quotes.

Oil prices rose on Tuesday on increasing concerns about tightening European supply after Russia, a key oil and natural gas supplier to the region, cut gas supply through a major pipeline.

US oil refiners are expected to post gangbuster second-quarter earnings as robust worldwide fuel demand and perilously low inventories charged up margins, but weaker demand in July and recession worries clouded the outlook for future results.

The Global Centre for Maritime Decarbonisation (GCMD) is working with 18 companies to launch an $18 million biofuels bunkering pilot project, the organisation said on Tuesday.