Asia’s hi-5 fuel oil spread crunched to its most narrow in five months as the very low sulphur fuel oil (VLSFO) market softened, while high sulphur fuel oil (HSFO) retained strength.
December hi-5, which is the premium of VLSFO over HSFO, narrowed to about $94 a metric ton on Wednesday at the Asia close (0830 GMT).
The VLSFO market has weakened in recent sessions as sell-offs persisted while supply fundamentals weighed.
In contrast, the HSFO market held its ground as some major trading houses continued to bid up the market, said market sources.
Refining margins for VLSFO continued to soften, with December cracks LFO05SGDUBCMc1 falling to premiums of about $11.45 a barrel, while 380-cst HSFO cracks firmed day-on-day at discounts of around $3.35 a barrel.
Meanwhile, Nigeria’s Dangote refinery offered low-sulphur straight-run fuel and slurry for loading in December, trade sources said. The tender closes on Wednesday.
INVENTORY DATA
– Fujairah heavy fuel inventories FUJHD04 plummeted 31.4% to 6.27 million barrels (0.99 million tons) in the week to Nov. 25, FOIZ data published by S&P Global Commodity Insights showed.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Shailesh Kuber)
