The VLSFO crack in Asia fuel oil rises to more than a week high

Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) rose to their highest level in more than a week on Friday, and traders expect the market to remain tight until the end of this month.

The front-month VLSFO crack against Dubai crude came to $14.62 per barrel during Asian trade on Friday, the largest since Dec. 2. The crack was $13.60 per barrel a day earlier, and has gained nearly 1% this week.

On Friday, cash differentials for Asia’s 0.5% VLSFO rose to a premium of $15.42 per tonne to Singapore quotes, comparably with $15.30 per tonne on Thursday.

Meanwhile, Asia’s cash differentials for 380-cst high sulphur fuel oil (HSFO) were at a premium of $1.36 per tonne to Singapore quotes on Friday, comparative to $1.22 per tonne in the previous session.

The 380-cst HSFO barge crack for January remained unchanged from Thursday to trade at a discount of $12.34 per barrel to Brent on Friday, displaying a 2% decrease this week, according to Refinitiv data.

ARA INVENTORIES are the largest inventories in the United Arab Emirates.

Data from Dutch consultancy Insights Global showed that fuel oil stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub dropped 8.2% to 1.2 million tonnes in the week to Dec. 9. ARA gasoil inventories have increased 6.3% to 1.9 million tonnes, according to data.

India’s fuel consumption fell in November after climbing a seven-month peak last month, according to government data on Thursday, as demand decreased in the world’s third biggest oil consumer after festival season.

Oil prices dropped on Friday as traders rip-off profits from a strong run-up this week, stoked by growing optimism that the rapid spread of the Omicron coronavirus variant will not affect global growth and fuel demand.

Source: Reuters