Asia Fuel Oil-VLSFO premium firms with stronger trade

SINGAPORE, Nov 12 (Reuters) - Asia's very low sulpur fuel oil (VLSFO) product traded at a firmer premium on Thursday, with the market largely supported by lower arbitrage supplies arriving this month.

Bids for spot VLSFO climbed day-on-day for late November and early December, data from market sources showed, lifting the cash premium above $30 a metric ton at the Asia close.

Meanwhile, product cracks also extended gains, closing near a premium of $20 a barrel on Thursday, based on LSEG data.

In contrast, the market for high sulphur fuel oil (HSFO) remained under pressure, with benchmarks softening day-on-day.

Spot 380-cst HSFO premiums edged down on a weaker market structure as backwardation spreads narrowed sharply in volatile trading. Cracks for 380-cst HSFO slipped back to a discount wider than $4 a barrel.

As for onshore inventories, residual fuel stockpiles climbed in the week, latest data from Enterprise Singapore showed. The inventories gained for a second consecutive week to a seven-week high, the data showed.

INVENTORY DATA

- Singapore residual fuel stockpiles rose 2.1% to 19.53 million barrels (3.08 million tons) in the week to November 11, Enterprise Singapore data showed.

OTHER NEWS

- Oil prices rose in Asia trade on Thursday as persistent geopolitical tensions in the Middle East offset pressure from rising regional crude output. O/R

- Asian buyers have been snapping up Atlantic Basin crude at lower prices after tanker freight rates on cargoes from Africa and Brazil slumped from all-time highs, traders, shipbrokers and analysts said.

- Brazil's Petrobras plans to increase production capacity at another six of its oil platforms, said its Chief Financial Officer in a call with analysts on Wednesday following the state-run oil firm's third-quarter earnings report.

- A preliminary agreement between ExxonMobil and Venezuela's PDVSA allows the US oil producer to evaluate seven areas for development that include undeveloped fields, mature areas and an exploration block, four people close to the matter said.

WINDOW TRADES O/AS

- 180-cst HSFO: No trade

- 380-cst HSFO: No trade

- 0.5% VLSFO: One trade

ASSESSMENTS