SINGAPORE: Asia’s cash premium for 0.5% very low sulphur fuel oil (VLSFO) dipped towards six-month lows on Tuesday as ample arrivals of arbitrage and regional cargoes kept the market suppressed.

Fuel oil supplies to Asia totalled about five million tonnes for August, Refinitiv ship-tracking data as of Tuesday showed. The monthly volume was last higher in January this year.

The spot cash differential for 0.5% VLSFO remains under pressure, sliding 70 cents to a premium of $13.87 per tonne over Singapore quotes.

Refining margins for the low-sulphur grade have also trended softer. The front-month 0.5% VLSFO crack averaged $14.80 per barrel in August so far, down from $25.50 per barrel in July.

The high-sulphur fuel oil (HSFO) market also retained downward pressure in recent trading sessions, with the 380-cst cash differential declining $1.98 to $4.33 per tonne on Tuesday.

India’s MRPL sought 25,000 tonnes of 380-cst straight-run 4.5% S max HSFO, for delivery at New Mangalore between Sept. 11-15. The tender closes on Tuesday with same-day validity.

Oil rose on Tuesday as renewed concerns over tight supply dominated market sentiment after Saudi Arabia warned that OPEC+ could cut output to correct a recent oil price decline.

Taiwan’s Formosa Petrochemical Corp, a major fuel exporter in Asia, has shut one of the two fluid catalytic cracker (FCC) units at its Mailiao refinery since Monday due to water leaking in a carbon monoxide boiler.

US crude inventory in the Strategic Petroleum Reserve (SPR) fell by 8.1 million barrels in the latest week to the lowest level in more than 35 years, according to data from the Department of Energy.