Asia Fuel Oil VLSFO Crack Hovers Near Multi-Month Peak, Shows Yearly Gain

SINGAPORE, Dec.31 (Reuters) – Asia’s first month crack for ultra-low sulfur fuel oil (VLSFO) at 0.5% eased on Friday after five consecutive sessions of gains, but stable regional demand and tight supplies have kept it a striking distance from its strongest level since February 2020.

The first-month VLSFO crack was at $ 17.05 per barrel against Dubai crude during Asian trading, down from a multi-month high of $ 17.84 per barrel in the previous session. Crack, however, has gained about 54% this year.

VLSFO crack averaged $ 12.83 a barrel this year, up 21% from an average of $ 10.59 in 2020, according to data from Refinitiv.

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Asia’s 0.5% VLSFO cash spreads, which jumped in the fourth quarter of 2021, were at a premium of $ 15.75 per tonne to Singapore quotes on Friday, from 16. $ 66 per ton Thursday.

Meanwhile, Asia’s cash differentials for 380 cst High Sulfur Fuel Oil (HSFO) fell 17 cents per tonne to Singapore quotes on Friday, from a premium of 16 cents. per ton during the previous session.

The first month’s 380 cst HSFO barge crack fell on Friday to trade at a discount of $ 11.87 per barrel against Brent, according to data from Refinitiv.

The barge crack has averaged minus $ 10.06 a barrel this year, compared to an average of minus $ 8.74 in 2020, according to data from Refinitiv.

WINDOW PROFESSIONS

– A 180 cst HSFO trade, no VLSFO agreement

OTHER NEWS

– Oil prices fell on Friday, but were expected to post their biggest annual gains in 12 years, boosted by the global economic recovery from the COVID-19 crisis and producer restrictions, even as infections hit record levels in the world.

– OPEC and its allies are likely to stick to their current policy of modest monthly increases in oil production at a meeting next week, four sources said, as demand concerns raised by the Omicron variant of the coronavirus are easing and oil prices are recovering. Read more

EVALUATIONS

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Report by Koustav Samanta; Editing by Subhranshu Sahu

Our standards: Thomson Reuters Trust Principles.

Carol N. Valencia