SINGAPORE: Asia’s cash premiums for 0.5% very low-sulphur fuel oil (VLSFO) rose for a second straight session on Monday, buoyed by firmer buying interests in the physical market.
Cash premiums for Asia’s 0.5% VLSFO climbed to $2.95 per tonne to Singapore quotes, up from $2.08 per tonne at the end of last week.
The front-month VLSFO crack jumped to $14.47 per barrel against Dubai crude during Asian trading hours on Monday, compared with $12.62 a barrel on Friday, Refinitiv Eikon data showed.
Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) slipped 2 cents to 13 cents per tonne to Singapore quotes, while the Nov/Dec time spread for the 380-cst HSFO traded at 50 cents per tonne on Monday.
Top oil exporter Saudi Arabia has raised the price differential of its flagship crude to Asia by more than double in December versus November, exceeding market expectations and sending a bullish signal to the global oil market, traders said.
The sharper-than-expected price hike comes after the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, agreed last week to maintain a production hike of 400,000 barrels per day for December despite consumers’ calls for higher output.
Having lagged a recovery in demand to pre-pandemic levels enjoyed by other fuels, jet fuel appears set finally to take off as more governments make air travel easier.
Global jet fuel demand is languishing 15-20% below 2019 levels, according to analysts, but confidence generated by rising vaccination levels has led to increased passenger flight bookings in recent weeks.
Two VLSFO cargo trades were reported in the Singapore trading window on Monday; No HSFO deals
Oil prices rose on Monday as positive signs for global economic growth supported the outlook for energy demand, while Saudi Arabia’s state-owned producer Aramco raised the official selling price for its crude.
China’s crude oil imports plunged in October to the lowest since September 2018, as large state-owned refiners withheld purchases because of rising prices while independent refiners were restrained by limited quotas to import.