SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) climbed for a fifth consecutive session on Wednesday to its strongest in more than two months, lifted by tight supplies and steady demand.
The VLSFO crack for June jumped to $27.37 a barrel against Dubai crude during Asian trading hours, the highest since March 14. The crack was at $26.18 per barrel on Tuesday. Cash differentials for Asia’s 0.5% VLSFO were at a premium of $33.84 a tonne to Singapore quotes, compared with $37.56 per tonne a day earlier.
Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $5.16 per tonne to Singapore quotes, as against a premium of $5.97 a tonne on Tuesday.
Cash differentials for 180-cst HSFO flipped to a discount of $3.49 per tonne to Singapore quotes, compared with a premium of 64 cents per tonne in the previous session. “Going forward into the second quarter, fuel oil supply into East Asia from conventional sources is expected to be lower, but Russian inflows could increase if the European Union imposes a complete ban on Russian oil purchases,” Refinitiv Oil Research analysts said in a note. The front-month barge crack for 380-cst HSFO traded at a discount of $13.99 a barrel to Brent on Wednesday, compared with minus $12.77 a barrel on Tuesday.
Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues dropped 6.6%, or by 725,000 barrels, from the previous week to 10.3 million barrels (1.5 million tonnes) in the week ended May 16, data via S&P Global Commodity Insights showed.
Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 24% lower. The weekly fuel oil stocks at FOIZ have averaged 10.4 million barrels so far this year, Reuters calculations showed.
Sales of marine fuel in the United Arab Emirates’ Fujairah marine refuelling and oil storage hub dropped 4% in April, official data showed, slipping to a two-month low.
April bunker sales volumes were about 665,000 cubic metres, according to the latest data from the Fujairah Oil Industry Zone (FOIZ), equivalent to about 636,500 tonnes, Reuters calculations showed. In March, Fujairah bunkering volumes were at about 691,000 cubic meters.
Sales of 380-cst high-sulphur fuel oil (HSFO) slipped to about 117,000 cubic meters in April, down 10% from the previous month, while demand for the mainstream 380-cst very low sulphur fuel oil (VLSFO) dropped 3% to about 513,000 cubic meters.
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