News: BHP Asia Fuel Oil-VLSFO market dips after crude falls; supplies remain tight

NEW DELHI, May 21 (Reuters) - Asia's low-sulphur fuel oil (VLSFO) market declined on Tuesday after crude oil prices weakened by more than $1 on demand worries but the downside was limited due to tight supplies.

Cash premiums for VLSFO were down about 25 cents at $7.75 a metric ton. Cash differential for 180-cst HSFO was pegged at a premium of $8.19 a ton, while the premium for 380-cst traded at $8.01 per ton.

The low-sulphur fuel oil market has retained strength due to a lack of prompt supply, particularly from Kuwait, amid peak summer demand in the Middle East, analysts at LSEG Research said in a note.

"However, this will likely ease when fresh Al-Zour volumes enter the market from July onwards, following Kuwait Petroleum Co's award of a second-half term tender of a maximum of 720,000 tons over the six-month period," they added.

OTHER NEWS - Oil prices dropped by more than $1 on Tuesday, extending losses on investor expectations that lingering U.S. inflation could keep interest rates higher for longer, depressing consumer and industrial demand.

- Russia's Lukoil last week restarted a key production unit at its Volgograd refinery, the largest in southern Russia, which was shut earlier this month after being damaged in a drone attack, two industry sources told Reuters on Monday.

- Brent crude oil's premium to Dubai quotes slipped on Tuesday to its lowest since December as ample sweet oil supply weighed on global markets, according to traders and LSEG data.

WINDOW TRADES - 180-cst HSFO: No trade - 380-cst HSFO: No trade - 0.5% VLSFO: One trades

ASSESSMENTS FUEL OIL

 CASH ($/T)			  ASIA CLOSE  CHANGE	PREV	  RIC 
											   CLOSE	  
 Cargo - 0.5% VLSFO		  601.62	-11.37	612.99   MFO05-SIN  

 Diff - 0.5% VLSFO			 7.75	 -0.25	  8.00   
 Cargo - 180cst			  529.96	  6.91	523.05   FO180-SIN  
 Diff - 180cst				 8.19	 -0.66	  8.85   
 Cargo - 380cst			  516.57	  6.32	510.25   FO380-SIN  
 Diff - 380cst				 8.01	  0.58	  7.43   
 Bunker (Ex-wharf)			 8.00	  0.00	  8.00			  
 Premium - 380cst										 

 Bunker (Ex-wharf)			 8.00	  0.00	  8.00			  
 Premium - 0.5% VLSFO									 

For a list of derivatives prices, including margins, please double click the RICs below. Brent M1 BRENTSGMc1 180cst M1 FO180SGSWMc1 180cst M1/M2 FO180SGSDMc1 180cst M2 FO180SGSWMc2 Visco M1 FOVISSGDFMc1 Visco M2 FOVISSGDFMc2 380cst M1 FO380SGSWMc1 380cst M1/M2 FO380SGSDMc1 380cst M2 FO380SGSWMc2 Cracks 180-Dubai M1 FO180SGCKMc1 Cracks 180-Dubai M2 FO180SGCKMc2 East-West M1 FOSGEWMc1 East-West M2 FOSGEWMc2 Barges M1 HFOFARAAMc1 Barges M1/M2 HFOFARAASMc1 Barges M2 HFOFARAAMc2 Crack Barges-Brent M1 HFOFARAACMc1 Crack Barges-Brent M2 HFOFARAACMc2