Asia Fuel Oil VLSFO crack hits highest in over 2 years, cash premiums jump

Asia’s front-month crack for 0.5 percent very low-sulphur fuel oil (VLSFO) rose on Monday to its highest level in over two years, while cash premiums for the marine fuel grade rose on stronger buying interests in the physical market.

In Asian trading hours, the front-month VLSFO crack climbed to $29.61 per barrel, the highest level since January 2020. It sank to $27.50 per barrel on Friday.

Cash premiums for Asia’s 0.5% VLSFO increased to $19.67 a tonne to Singapore quotes, compared to $16.88 per tonne on Friday, while the VLSFO time spread increased its backwardation by $3 to trade $33.75 per tonne on Monday.

On Monday, Asia’s cash premiums for the 380-cst high sulphur fuel oil (HSFO) rose to $5.07 per tonne, the highest level since October last year. The premium was $3.34 per tonne at the end of last week.

IMPORTS IN CHINA OIL

China’s crude oil imports for the first two months of 2022 increased by about 5% from the previous year, according to statistics on Monday, as independent refiners, also known as teapots, reduced production due to reduced margins and government restrictions.

Imports in the January and February period totalled 85.14 million tonnes, or about 10.53 million barrels per day, according to the General Administration of Customs on Monday, without giving a breakdown for the individual months.

WINDOW TRADES

One 380-cst high-sulphur fuel oil (HSFO) contract, and no 180-cst HSFO trades.

There was no VLSFO trade reported.

OTHER NEWS

Oil prices rose to their highest level since 2008 on Monday as the United States and its European partners approved a Russian oil import ban and delays in the return of Iranian crude to global markets fueled supply fears.
Source: Reuters