Refining cracks for high sulphur fuel oil posted weekly gains as of Friday, as the market retained strength against a backdrop of low onshore inventories at key storage hubs.
Singapore’s prompt-month 380-cst HSFO crack closed at discounts of about $5.50 a barrel at 0830 GMT, logging a climb of nearly 20% from last week, LSEG data showed.
Stockpiles at key fuel oil storage hubs slumped this week, based on latest data.
Singapore inventories slumped to their lowest in five-and-a-half years as incoming supplies to Asia fell, with the Middle East exporting fewer cargoes due to peak summer demand.
Meanwhile, Fujairah inventories fell to six-week lows, drawn by firm domestic demand for power generation in the region during its summer months.
The tighter inventories are expected to keep HSFO margins buoyed, according to analysts.
In contrast, margins for Very Low Sulphur Fuel Oil (VLSFO) have weakened as spot bunkering demand continued to remain tepid this week at the Singapore hub. Bunker premiums at Singapore have weakened further this week, based on industry sources.
The crack spread for VLSFO closed lower, at premiums below $8 a barrel on Friday, declining from last week.
Source: Hellenic Shipping News
