SINGAPORE: Asia’s high-low (HiLo) sulphur fuel oil spread widened on Wednesday as the very low sulphur fuel oil (VLSFO) market continued to hold firm. The front-month HiLo spread, which is the price difference between front-month 0.5% VLSFO and 380-cst high-sulphur fuel oil (HSFO) swaps, rose $15.50 to $336.50 a tonne on Wednesday, Refinitiv data showed.

The spread has risen more than 100% in the year so far. The 0.5% VLSFO cash differential climbed 93 cents to a premium of $79.41 per tonne to Singapore quotes on Wednesday, breaching the previous record high of $79.40 on July 4. Margins for VLSFO continued to lag behind that of cleaner refined products this year, which has made VLSFO production less attractive for refiners. Meanwhile, cash differentials for HSFO discounts remained stuck in discounts for the near term as Russian supplies continued to find their way to Asia. Marine fuel sales in Singapore, the world’s largest bunkering hub, fell by 9% month-on-month to a two-month low of 3.75 million tonnes in June, latest official data showed on Wednesday.

High premiums on low-sulphur bunker fuel drove some demand to other bunkering ports, traders said, and vessel arrivals for bunkering dipped.

Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues dipped 4% from the previous week to 12.14 million barrels (1.91 million tonnes) in the week ended July 11, latest data from S&P Global Commodity Insights showed. Oil edged up on Wednesday, a day after settling below $100 a barrel for the first time since April, and gains were limited by a US supply report showing rising inventories and caution ahead of US inflation data.

Singapore has set up its first battery energy storage system to manage peak consumption at the world’s largest container transhipment hub.