SINGAPORE: Asia’s refining margin for very-low sulphur fuel oil (VLSFO) climbed more than 20% on Friday versus the previous week, though steady regional supplies offered via tenders for May loading capped the upside.

The front-month margin for 0.5% VLSFO closed at a premium of $8.78 a barrel at 0430 GMT, firming by more than 20% week-on-week.

Cash premiums for 0.5% VLSFO closed at $4.75 a tonne over Singapore quotes. The spot market was stuck in single-digit premiums for the whole of April, amid ample prompt supplies.

Regional suppliers in Asia have been active in offering residual fuel products for loading in May, with steady tenders seen from Indonesia’s Pertamina and South Korea’s S-Oil. In a more recent tender, Thailand’s PTT offered 35,000 tonnes of VLSFO for loading between May 29 and May 31. Meanwhile, high sulphur fuel oil’s cash premium closed at $6.25 a tonne on the last trading day of the month, while front-month margins fell to a discount of $10.74 a barrel at 0430 GMT.

Oil prices posted mild gains on Friday, but headed for a second week of declines as disappointing US economic data and uncertainty over further interest rate hikes weighed on the demand outlook. Refining giant Sinopec Corp sees China’s diesel and gasoline demand growing faster in the second quarter than in the first three months of this year alongside the Chinese economic recovery, a senior company executive said on Friday.

Iran seized a Marshall Islands-flagged oil tanker in the Gulf of Oman in international waters on Thursday, the US Navy said, the latest in a series of seizures or attacks on commercial vessels in sensitive Gulf waters since 2019.

Exxon Mobil Corp and its partners have approved a $12.7 billion investment for their fifth and most expensive offshore oil project in Guyana, the US firm said in a statement.