SINGAPORE: The spot cash premium for 0.5% very low sulphur fuel oil (VLSFO) surged to a six-month high on Wednesday as the product traded at a higher value for end February to early March loading.
Arbitrage supplies could dip into the later half of February as the West appears to be shorter on low-sulphur vacuum gasoil supplies, which could lead to an overall tighter blendstocks pool for Asia, trade sources said.
The 0.5% VLSFO cash differential rose to a premium of $28.40 a tonne on Wednesday, while the market’s front-month crack climbed to $14.16 a barrel at the Asia close (0830 GMT).
However, downstream bunker fuel premiums were lagging in recovery as overall prompt supplies remained ample. Premiums for delivered 0.5% VLSFO bunker fuel were in the range of $30-35 earlier this week, according to traders.
Residual fuel oil stocks at Fujairah dipped 2% to 9.71 million barrels (1.53 million tonnes) in the week ended Jan. 30, showed data from the Fujairah Oil Industry Zone published by industry information service S&P Global Commodity Insights
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