SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) climbed to its highest in a week on Thursday, supported by tight regional supplies.

The VLSFO crack for June climbed to $21.72 barrel against Dubai crude during Asian trading hours, the highest since May 5. The crack was at $21.16 per barrel on Wednesday. Cash premiums for Asia’s 0.5% VLSFO rose to $18.10 a tonne to Singapore quotes, compared with $17.83 per tonne a day earlier.

Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $6.29 per tonne to Singapore quotes, as against a premium of $6.91 per tonne on Wednesday.

The cash premiums for 180-cst HSFO were at a premium of $21.19 per tonne to Singapore quotes on Thursday, 15 cents higher from the previous session.

Singapore’s onshore fuel oil stocks fell 15% to 17.5 million barrels, or about 2.6 million tonnes, in the week to May 11, the lowest level since July 2019, according to the Enterprise Singapore data. Weekly fuel oil inventories have averaged 21.6 million barrels so far this year, compared with the weekly average of 22.5 million barrel in 2021, Reuters calculations showed.

The onshore fuel oil inventories were 33.8% lower compared with the level a year-ago.

Two 380-cst high-sulphur fuel oil (HSFO) deals, no 180-cst HSFO trades

Oil prices dropped more than 2% on Thursday in a volatile week as recession fears dogged global financial markets, outweighing supply concerns and geopolitical tensions in Europe.

Rising concerns over energy security and climate change will galvanize record new capacity to generate renewable power in 2022, the International Energy Agency forecast on Wednesday.