SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) eased on Wednesday from a multi-month high touched in the previous session, while cash premiums for the marine fuel rose to a nine-month high driven by stronger cargo demand.
The front-month VLSFO crack was at $14.83 per barrel against Dubai crude during Asian trade, compared with $14.90 per barrel a day earlier.
Cash differentials for Asia’s 0.5% VLSFO were at a premium of $5.31 a tonne to Singapore quotes, their highest since Feb. 9. They were at a premium of $4.44 per tonne on Tuesday, and have gained 175% in the last week.
Meanwhile, Asia’s cash premium for 380-cst high sulphur fuel oil (HSFO) rose to 65 cents per tonne to Singapore quotes on Wednesday, up from 23 cents per tonne in the previous session.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues jumped 42.2%, or 3.1 million barrels (about 465,000 tonnes), from the previous week to 10.5 million barrels (1.6 million tonnes), data via S&P Global Platts showed.
Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 17% higher.
Fuel oil stocks at FOIZ have averaged 10.3 million barrels so far this year, compared with a weekly average of 12.9 million barrels in 2020, Reuters calculations showed.
US distillate fuel inventories, which include diesel and heating oil, fell by 3.3 million barrels for the week ended Nov. 5, according to market sources, citing American Petroleum Institute figures.
No VLSFO or HSFO trades were reported in the Singapore trading window on Wednesday.
A Vietnamese-flagged oil tanker that American officials said was seized by Iran last month has left Iran and entered the Gulf of Oman, ship tracking data showed, and an Iranian official said, on Wednesday.
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