SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose on Tuesday, surging to the strongest level in more than 22 months, buoyed by steady demand and persistently tighter supplies.

The front-month VLSFO crack climbed to $16.29 per barrel against Dubai crude during Asian trading hours, a level last seen in Feb. 2020. The crack was at $15.68 a barrel in the last trading session on Friday.

Cash premiums for Asia’s 0.5% VLSFO were at $16.88 a tonne to Singapore quotes, compared with $16.46 on Friday. Meanwhile, Asia’s cash differentials for 380-cst high sulphur fuel oil (HSFO) were at a premium of $1.03 a tonne to Singapore quotes on Tuesday, down from $1.90 on Friday.

China’s oil consumption is expected to keep growing for a decade on robust chemical demand, reaching a peak of about 780 million tonnes a year by 2030, a research institute affiliated with China National Petroleum Corp (CNPC) said on Sunday.

In its latest report, the research group said that diesel fuel, gasoline and kerosene consumption are forecast to peak some time around 2025 at about 390 million tonnes a year. The strong petrochemical demand will support rising consumption through to 2030.

Overall oil demand will fall after 2030 as transportation consumption declines amid the electrification of vehicles while chemical demand remains stable during the period, the ETRI said.