Asia’s hi-5 fuel oil spread widened for a second consecutive session, as the very low sulphur fuel oil (VLSFO) market continued to extend its recovery.
The front-month hi-5, which reflects VLSFO’s premium over 380-cst high sulphur fuel oil (HSFO), closed at $77.50 a metric ton, showed data compiled by LSEG.
Cash differentials for VLSFO have recovered in recent sessions, with the product trading higher in the spot market.
In contrast, HSFO cash differentials remained in discounts to cargo quotes amid an absence of bullish drivers.
Meanwhile, cracks for VLSFO strengthened while HSFO steadied. The Singapore October VLSFO crack closed at a premium near $7 a barrel on Tuesday, while 380-cst crack remained near a discount of $5 a barrel.
BUNKER DATA
Marine fuel sales at the UAE’s Fujairah bunker hub extended gains for a second straight month in August, logging a four-month high of about 644,000 metric tons, Fujairah Oil Industry Zone data showed.
High-sulphur sales retreated while low-sulphur sales climbed. The price difference between low-sulphur fuel and high-sulphur fuel had narrowed into August, after widening sharply in July.
WINDOW TRADES
– 180-cst HSFO: No trade – 380-cst HSFO: One trade – 0.5% VLSFO: One trade
Source: Reuters
