SINGAPORE Asia’s cash premiums for fuel oil dipped on Thursday as market backwardation narrowed. The spot cash premium for 0.5% very low sulphur fuel oil (VLSFO) was pegged lower at $12.15 a tonne, as front-month backwardation narrowed day-on-day to $10.75 a tonne at the Asia close (0830 GMT).

Meanwhile, cash premium for 380-cst high sulphur fuel oil (HSFO) was pegged at $5.80 a tonne, as front-month backwardation crunched by nearly 50% day-on-day to $3.50 a tonne by 0830 GMT.

Despite the daily declines, the overall market was still set for support into the coming weeks, especially for the high-sulphur product.

Fuel oil inventories at key trading hub Singapore edged down by more than 10% from last week as net imports continued to decline, official data showed on Thursday.

Weekly net fuel oil imports, which are calculated by subtracting total exports from total imports, fell 23% week-on-week to 542,000 tonnes.

Residual fuel oil stocks at key trading hub Singapore fell by 11% to 20.62 million barrels (3.25 million tonnes) in the week to May 3, based on Enterprise Singapore data.

Fujairah fuel oil inventories rose 3% to 9.96 million barrels (1.57 million tonnes) in the week to May 1, based on Fujairah Oil Industry Zone data published by S&P Global Commodity Insights.

Oil prices rose on Thursday, but were unable to claw back the more than 9% decline during the previous three days, as demand concerns in major consumers overrode signals that the US may pause its interest rates increases.

A drone attack set ablaze product storage facilities at one of the largest oil refineries in southern Russia, but emergency services extinguished the fire just over two hours later, and the plant was working normally, TASS news agency reported.