SINGAPORE: Asia’s refining cracks for very low sulphur fuel oil (VLSFO) posted weekly gains of more than 25% on Friday, led by a recent rebound in spot market sentiment.

The front-month crack for 0.5% VLSFO was at a premium of $17.58 a barrel to Dubai quotes at Friday’s Asia close (0830 GMT), hitting two-month highs.

The uptick was led by a recent rally in spot market premiums, which have been hovering near five-month highs since last week.

The talk of potential supply tightness in February spurred the rally, though its strength eased slightly in recent sessions, with some trade sources saying the gains were likely to be temporary.

Meanwhile, cracks for high sulphur fuel oil (HSFO) were also slightly firmer. The front-month 180-cst HSFO crack was at a discount of 18.33 a barrel on Friday, climbing by about 5% from the previous week. Fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell 2% to 1.12 million tonnes in the week ended Jan. 26, latest data from Dutch consultancy Insights Global showed.

Oil prices rose on Friday, buoyed by stronger-than-expected US economic growth and hopes of a rapid recovery in Chinese demand as COVID-19 cases and deaths plunged from last month’s peak levels.

Pakistan’s generators produced more power than was required on Monday, causing voltage fluctuations that culminated in a system collapse, plunging 220 million people into darkness, an internal government document reviewed by Reuters showed.

The European Commission is proposing that the EU set a $100 per barrel price cap on premium Russian oil products such as diesel and a $45 per barrel cap on discounted products such as fuel oil, European Union officials said on Thursday.

The US Department of Energy (DOE) on Thursday will announce over $100 million in funding to expand US biofuels production, as the Biden administration works to cut greenhouse gas emissions from transportation and meet climate goals, the department told Reuters.