Refining cracks for high sulphur fuel oil (HSFO) firmed in Asia on Wednesday, though trade sources eyed mixed drivers that have swung prices in volatile movements over recent sessions.
The cracks surged late-Tuesday after U.S. President Donald Trump reimposed a stricter policy on Iran, though some sources said actual supply disruptions were still unclear.
Singapore’s March 380-cst HSFO/Brent crack (FO380BRTCKMc1) closed at a discount of 78 cents a barrel on Wednesday, LSEG data showed. The crack reached narrower discounts during intra-day trading before easing slightly, according to trade sources.
HSFO has received support due to risks of tighter logistics after the U.S. imposed broader sanctions on Russia, while a tighter Middle Eastern crude oil market also buoyed sentiment after OPEC+ delayed its output hike in the first quarter.
However, strength could remain capped on weaker demand from China, said sources, while broader tariffs also added volatility to the market.
Spot premiums steadied in recent sessions, with 380-cst HSFO cash premium pegged above $7.25 a metric ton on Wednesday.
Meanwhile, cash premium for very low sulphur fuel oil (VLSFO) extended declines on Wednesday, while product crack closed largely stable at a premium of about $11.30 a barrel. (LFO05SGBRTCMc1)
In tenders, Kuwait’s KPC offered two cargoes of coker gasoil for loading over Feb. 16-17 and Feb. 22-23. Separately, Taiwan’s CPC offered one cargo of catalyst fractionator bottom for Feb. 13-17 loading. Both tenders closed on Wednesday, said sources
