Fuel oil refining margins logged a yearly increase in Asia, data from LSEG showed on Friday, though supply pressure is expected to weigh on cracks into 2024.
Margins edged higher this year amid a broader recovery for refined fuels demand across Asia, while a lower crude oil price trend also contributed to higher margins.
Front-month cracks for 0.5% very low sulphur fuel oil (VLSFO) were at premiums of $12.14 a barrel LFO05SGDUBCMc1 on Friday’s Asia close, based on LSEG data, on track for a rise of 47% higher compared to the start of this year.
Cracks for 380-cst high sulphur fuel oil (HSFO) were at discounts of $10.93 a barrel FO380DUBCKMc1, firming 49% versus early January.
However, the market is set to come under pressure in 2024 as Kuwait exports are set to rise, while Russian supplies to China and India will stay elevated, traders and analysts said.
Traders are watching for Kuwait’s Al Zour refinery to reach its full capacity for commercial exports next year, while eyeing the progress of start-ups at the Dangote complex in Nigeria and coker units in Mexico.
Source: Hellenic Shipping News
