SINGAPORE: Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack against Dubai crude fell to $12.28 a barrel on Wednesday, down from $13.31 a barrel in the previous session, amid rising crude oil prices.
This came as oil rose on Wednesday, supported by an OPEC+ decision to stick to its plan to restore supply to the market gradually and by the slow pace of nuclear talks between Iran and the United States.
By contrast, the VLSFO cash differential extended gains, contracting its discount to minus $1.99 a tonne to Singapore quotes, the narrowest in three weeks.
The narrower discount came despite an absence of deal activity in the Singapore window and was seen as a reflection of relatively firmer front-month swaps contracts for the fuel, trade sources said.
Meanwhile, fuel oil inventories in the Fujairah bunkering and storage hub soared 23% to a four-week high in the week ended May 31, data released on Wednesday showed.
The higher inventories came amid lower exports from the Fujairah oil hub together with firm imports, trade sources said.
Fujairah Oil Industry Zone inventories for heavy distillates and residues jumped by 2.78 million barrels, or about 438,000 tonnes, to 14.65 million barrels, or 2.31 million tonnes, data via S&P Global Platts showed. However, Fujairah’s fuel oil inventories were 9% lower than year-ago levels.
Exports from the UAE fell to 150,000 tonnes in the week ended May 30 which were “the lowest weekly exports since December 2020 and less than half the year-to-date weekly average of 334,000 tonnes”, according to assessments by Refinitiv Oil Research.
This follows a strong month of Fujairah fuel oil exports which were at 1.56 million tonnes in May, according to Refinitiv Oil Research.
No 0.5% VLSFO or high-sulphur fuel oil (HSFO) cargo trades were reported in the Singapore trading window.