Asia fuel oil markets were largely stable on Friday in thin trade, while a key spread between two benchmark grades narrowed from last week.
The premium of very low sulphur fuel oil (VLSFO) over 380-cst high sulphur fuel oil (HSFO), commonly known as the hi-5 FO05-380SGMc1, closed below $90 a metric ton, narrowing about 7%, LSEG data showed.
The spread has shown a largely narrowing trend through the fourth quarter due to a weakening market for VLSFO.
Selling interest persisted in the spot VLSFO market, with multiple offers for January prevailing at narrow premiums to cargo quotes on Friday.
Meanwhile, the HSFO spot market held stable, though the derivatives front continued to see strength emerging for intermonth spreads trading.
Refining cracks for both fuel oil grades also extended weekly gains, with HSFO cracks firming via a steeper extent, based on LSEG data.
Singapore 380-cst HSFO cracks FO380DUBCKMc1 closed at discounts narrower than $4 per barrel on Friday, while VLSFO cracks LFO05SGDUBCMc1 closed at premiums above $10 per barrel.
INVENTORY DATA
– Fuel oil inventories in the ARA STK-FO-ARA inched 1% lower to 1.28 million tons in the week to Dec. 19, data from Dutch consultancy Insights Global showed.
