SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose for a third straight session on Friday, climbing to a nearly two-week high, lifted by active demand and tight supplies.
The front-month VLSFO crack climbed to $22.86 per barrel against Dubai crude during Asian trading hours, the strongest since April 18. The crack was at $21.65 a barrel on Thursday.
The VLSFO crack jumped 7.7% so far this week, the biggest weekly gain since March 11, Refinitiv Eikon data showed.
Cash premiums for Asia’s 0.5% VLSFO slipped 75 cents to $18.70 a tonne to Singapore quotes, weighed down by two weaker deals in the physical market on Friday. Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) rose to $28.92 per tonne to Singapore quotes, as against $28.73 per tonne in the previous session.
The cash premiums for 180-cst HSFO were at a premium of $36.35 per tonne to Singapore quotes on Friday, 30 cents lower from Thursday. Companies reopening factories in locked-down Shanghai are booking hotel rooms to house workers and turning vacant workshops into on-site isolation facilities as authorities urge them to resume work while complying with tough COVID-19 curbs. Hundreds of companies including multinationals Tesla and 3M have reopened factories in the Chinese economic hub under local guidelines requiring them to isolate workers inside a “closed-loop”.
But executives say they are not yet running at full capacity and describe the process as far from straightforward, given the logistical hassles of compliance, including a lack of space, and having many workers remain stuck at home in locked-down housing compounds.
Fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 1.4% to 967,000 tonnes in the week ended April 28, data from Dutch consultancy Insights Global showed. This comes after Singapore’s onshore fuel oil stocks fell to a seven-month low of 19.1 million barrels, or about 2.9 million tonnes, in the week ended April 27, according to the Enterprise Singapore data.