SINGAPORE: Asia’s refining margin for 380-cst high sulphur fuel oil (HSFO) climbed to nearly a year’s high on Wednesday, backed by lower refinery output and seasonal demand expectations.

The front-month crack for 380-cst HSFO jumped to a discount of $7.60 a barrel at the Asia close (0830 GMT), while the product’s cash premium edged up to $7 a tonne over Singapore quotes. “We view the crude production cuts as constructive to the term structure of an already-strong high sulphur market, with potentially less refinery bottoms production leading to supply tightness, particularly to HSFO output,” said Emril Jamil, Refintiv’s senior analyst for crude and fuel oil.