Asia Fuel Oil-Market structure eases as timespreads sell off

SINGAPORE, Sept 28 (Reuters) - The market structure for fuel oil softened at the Asia close on Monday, as timespreads for both high-sulphur fuel oil (HSFO) and very low-sulphur fuel oil (VLSFO) sold off during the day.

Both markets remained in relatively strong backwardation into the end of the year, reflecting uncertainty over product outflows, with peace talks between the US and Iran deadlocked.

Fuel oil cracks largely held their strength from last week. The 380-cst HSFO/Brent crack was steady near a premium of $3.45 a barrel, while the VLSFO crack dipped slightly but held above a premium of $23 a barrel.

Cash differentials were pegged at slightly lower premiums than the previous trading day, reflecting weaker timespreads.

The prompt hi-five spread slipped to about $125 a metric ton.

REFINERY UPDATES

- US oil refiners are expected to have about 542,000 barrels per day of capacity offline for the week ending October 2, increasing available refining capacity by 289,000 bpd, research company IIR Energy said on Monday.

OTHER NEWS

- Brent rebounded more than 2% on Monday after US President Donald Trump rejected an Iranian proposal to end the conflict and reopen the Strait of Hormuz. O/R

- Crude oil exports from key Middle East producers rebounded in September to 12.8 million barrels per day, the highest since the US-Israeli war with Iran started in February, data from Kpler showed on Monday, as Saudi Arabia and the United Arab Emirates boosted exports.

- Goldman Sachs said a US diesel export ban would initially put moderate downward pressure on diesel prices, and that export restrictions, including quotas, were a plausible outcome.

- TotalEnergies said on Monday it was raising fourth-quarter share buybacks to $2.5 billion from $1.5 billion in recent quarters, as high global energy prices boost returns for oil and gas majors.

WINDOW TRADES O/AS

- 180-cst HSFO: No trade.

- 380-cst HSFO: No trade.

- 0.5% VLSFO: No trade.

ASSESSMENTS