SINGAPORE: The cash premium and the front-month time spread of Asia’s 0.5% very low-sulphur fuel oil (VLSFO) jumped on Wednesday, hitting multi-month highs on a tightening supply outlook.

Supplies of finished grade VLSFO bunkers in particular are dwindling while arbitrage volumes in July and August are expected to narrow, trade sources said.

Boosted by stronger bids and deals in the Singapore window, the VLSFO cash premium jumped to $2.17 a tonne above Singapore quotes on Wednesday, up from $1.53 a tonne in the previous session and its highest since March 4.

The front-month VLSFO time spread climbed to a near five-month high of $3.25 a tonne, up from $2.50 a tonne in the previous session, Refinitiv data in Eikon showed.