SINGAPORE: Refining cracks for 0.5% very low sulphur fuel oil (VLSFO) touched an all-time high in Asian trading hours on Thursday, buoyed by tight supply fundamentals and lower crude prices.

The front-month 0.5% VLSFO crack against Dubai crude touched a high of $38.93 per barrel during Asia’s trading hours, surpassing the previous record high of $37.58 per barrel hit on May 31, 2022, before retreating slightly.

The strength largely mirrored that of 10-ppm gasoil cracks, which have extended an uptrend throughout June amid persistent tightness in supplies.

Persisting tightness in gasoil blending components and limited direct arbitrage inflows have kept the VLSFO market supported this year.

Cash premiums for 0.5% VLSFO also edged further towards previous record highs, with premiums at $77.66 per tonne to Singapore quotes on Thursday, versus $77.16 per tonne the previous day.

SINGAPORE INVENTORIES

Singapore fuel oil stocks rose 6% to 21.348 million barrels in the week to June 22, data from Enterprise Singapore showed Thursday.

Oil prices fell more than 2% on Thursday as investors recalibrated assessments of recession risks and fuel demand amid interest rate hikes in major economies.

Russia is increasing gasoline and naphtha supplies to Africa and the Middle East as it struggles to sell fuel in Europe, while Asia is already taking bigger volumes of Russian crude, Refinitiv Eikon data showed and sources said.