SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) surged to a 10-month high on Friday, posting a third consecutive weekly gain, supported by robust regional demand amid tight supplies.
The front-month VLSFO crack rose to $15.68 per barrel against Dubai crude during Asian trade, a level not seen since Feb. 25. The crack was at $15.64 per barrel a day earlier, and has gained 2.6% this week.
The current market tightness would likely incentivise higher production and inflows from other regions, weighing on margins in coming weeks, market watchers said.
Cash differentials for Asia’s 0.5% VLSFO were at a premium of $16.46 a tonne to Singapore quotes on Friday, compared with $18.91 per tonne on Thursday.
Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) rose to $1.90 per tonne to Singapore quotes, up from $1.23 per tonne in the previous session.
The 380-cst HSFO barge crack for January slipped to trade at a discount of $11.34 a barrel to Brent, Refinitiv data showed.
Fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose 5% to 1.1 million tonnes in the week to Dec. 23, data from Dutch consultancy Insights Global showed.
The data showed ARA gasoil inventories rose 1.9% to 1.7 million tonnes. Three HSFO trades, one VLSFO deal. Oil prices fell on Friday in thin, holiday trade after a three-day rally, with investors trying to gauge the Omicron coronavirus variant’s impact on demand.
India’s crude oil imports in November rose to their highest level in 10 months as refiners stocked up to boost runs in anticipation of strong demand in the world’s third-largest oil consumer and importer.
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