SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose on Monday, climbing to its highest in a week, while cash premiums for the marine fuel grade rose to their highest level since early February 2020.
The front-month VLSFO crack jumped to $25.58 per barrel against Dubai crude during Asian trading hours, the strongest since March 14. It was at $23.52 per barrel on Friday.
Cash premiums for Asia’s 0.5% VLSFO rose to $24.75 a tonne to Singapore quotes, compared with $24.30 per tonne on Friday, while the April/May VLSFO time spread widened its back war dated structure on Monday to trade at $30.25 a tonne.
Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $5.39 per tonne to Singapore quotes on Monday, compared with $4.57 per tonne at the end of last week.
China’s clean marine fuel exports rose 21% in the first two months of 2022 from a year ago, following an increase in Beijing’s export quotas, customs data showed on Sunday.
Exports of low-sulphur fuel oil reached 3.64 million tonnes in January and February, up from 3.02 million tonnes in the corresponding period last year, data from the General Administration of Customs showed.
China granted allowances of 6.5 million tonnes for exports of the clean bunker fuel to five refiners in its first 2022 allotment, up 30% from the first batch for 2021. Chinese oil refiners have been expanding production capacity for clean marine fuel after the government pledged to establish a regional bunker refuelling hub in the coastal region.
Two 180-cst high-sulphur fuel oil (HSFO) deals, no 380-cst HSFO trades. Two VLSFO trades were reported,
Saudi Arabia regained the spot as China’s top crude supplier in the first two months of 2022, having been leapfrogged by Russia in December, while Russian shipments dropped 9% as a cut in import quotas led independent refiners to scale back purchases.
Oil prices jumped more than $3 on Monday, with Brent above $111 a barrel, as European Union nations consider joining the United States in a Russian oil embargo, while a weekend attack on Saudi oil facilities caused jitters.