SINGAPORE: Asia’s cash premiums for 0.5% very low-sulphur fuel oil (VLSFO) rose on Wednesday, while the front-month crack for the marine fuel grade soared to its highest since February 2020.
Cash premiums for Asia’s 0.5% VLSFO rose to $17.61 a tonne to Singapore quotes, up from $16.88 per tonne a day earlier.
The front-month VLSFO crack rose for a fourth consecutive session, jumping to $16.88 per barrel against Dubai crude during Asian trading hours. It was at $16.29 per barrel on Tuesday.
Meanwhile, the 380-cst HSFO barge crack for January traded at a discount of $11.94 a barrel to Brent on Wednesday, while cash differentials for 380-cst high sulphur fuel oil (HSFO) were at a premium of 18 cents per tonne to Singapore quotes.
Workers at Indonesia’s PT Pertamina have cancelled a planned 10-day national strike after their trade union and the state energy firm’s management agreed on labour terms, union president Arie Gumilar said in a statement on Wednesday.
The state energy company is Southeast Asia’s biggest fuel importer and at least 10,000 staff were initially slated to join the industrial action, according to reports.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues rose 6.7%, or 601,000 barrels (about 90,000 tonnes), from the previous week to 9.5 million barrels (1.4 million tonnes), data via S&P Global Platts showed. Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 15% lower.
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. One VLSFO deal, no HSFO trades
US oil rose for a sixth consecutive session on Wednesday while Brent gained more ground with a broad-based rally in global markets supporting prices.
China’s commodities markets suffered through a turbulent year in 2021 as an energy crunch and subsequent government intervention roiled the prices of products from thermal coal to urea, whipsawing them from record highs to monthly lows in weeks.
Still, the market is broadly set to end the year higher, notably tin, edible oils and thermal coal, though a second year of wild swings and sharp gains are unlikely amid expectations of more subdued economic growth.
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