SINGAPORE: Asia’s front-month 0.5% very low-sulphur fuel oil (VLSFO) crack fell to a more than one-week low on Tuesday amid easing concerns of supply shortages and as crude oil prices climbed to six-week highs.
Supplies of VLSFO were seen improving with expectations of steady arbitrage flows into Singapore in October and after official data showed Singapore onshore inventories jumped to a seven-week high of 24.15 million barrels, or 3.8 million tonnes.
The front-month VLSFO crack fell 38 cents to $12.57 a barrel above Dubai crude, its lowest since Sept. 6, Refinitiv data showed.
Oil prices hit a six-week high on Tuesday as another hurricane threatened to bring heavy rain to Texas and parts of Louisiana that were still recovering from Ida, and as the International Energy Agency forecast a big demand rebound for the rest of the year.
Three 0.5% very low-sulphur fuel oil (VLSFO) cargo trades were reported in the window totalling 60,000 tonnes. One 380-cst high-sulphur fuel oil (HSFO) cargo trade was reported totalling 20,000 tonnes.
Pakistan’s PSO finalised a tender to import HSFO over Oct. 1-15, opting to award only one of two cargoes it originally sought after having extended the validity date of the tender by two days to Sept. 8. PSO bought 65,000 tonnes of 180-cst HSFO with a maximum 3.5% sulphur content to Max Energy for delivery over Oct. 1-15 at a premium of $69.33 per tonne to Middle East quotes on a CFR basis.
Vitol submitted the lowest offer for the second HSFO cargo with the same specifications at $80.88 per tonne but PSO chose not to award it.