SINGAPORE: Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) dipped on Thursday, while cash premiums for the marine fuel grade jumped amid firmer deals in the physical market.

The front-month VLSFO crack inched lower to $21.66 per barrel against Dubai crude during Asian trading hours, compared with $21.73 per barrel a day earlier. The cracks have shed 11% in the last two weeks.

Cash differentials for Asia’s 0.5% VLSFO were at a premium of $21.49 a tonne to Singapore quotes, up from $18.90 per tonne on Wednesday.

Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) were at $20.81 per tonne to Singapore quotes, compared with $20.98 per tonne on Wednesday.

Singapore’s onshore fuel oil stocks dropped 2.4% to a two-week low of 20.4 million barrels, or about 3.1 million tonnes, in the week to April 6, according to the Enterprise Singapore data.

Weekly fuel oil inventories have averaged 22.2 million barrels so far this year, compared with the weekly average of 22.5 million barrel in 2021, Reuters calculations showed. Onshore fuel oil inventories were 13.5% lower compared with year-ago levels.

Five VLSFO deals were reported, no HSFO trades. China’s state refiners are honouring existing Russian oil contracts but avoiding new ones despite steep discounts, heeding Beijing’s call for caution as western sanctions mount against Russia over its invasion of Ukraine, six people told Reuters.

Oil prices rose on Thursday from a three-week low touched in the previous session after consuming nations announced a huge release of oil from emergency reserves, as worries over tight supplies still clouded the market outlook.