Asia’s VLSFO crack dips to 2-week low
Asia’s 0.5% very low-sulphur fuel oil (VLSFO) crack fell to a two-week low on Monday as benchmark crude oil prices climbed to a more than two-year high. The front-month VLSFO crack was at $11.31 a barrel above Dubai crude on Monday, down from $11.79 a barrel on Friday and its lowest since May 31, Refinitiv data in Eikon showed.
VLSFO supplies in the Singapore hub are expected to remain plentiful over the near term, and spot bunker demand relatively slow, trade sources said.
Volumes of marine fuel sales in Singapore fell to an 11-month low in May, official data showed, as intensifying price competition from China helped lure bunkering traffic away from the world’s top hub, five trade sources said.
Sales of marine fuels in Singapore were at 4.07 million tonnes in May, data from the Maritime and Port Authority of Singapore (MPA) showed.
This comes amid rising price competition from suppliers at China’s top bunkering hub of Zhoushan which have mostly offered delivered 0.5% marine fuel oil at an until recently unusual discount to Singapore prices amid ballooning inventories as Chinese refiners boost production of the fuel to take advantage of export quotas and tax cuts, as well as financial incentives to boost supplies.
A total of 3,350 ships called in May for bunkers in Singapore, down from 3,458 in April and its lowest since February, the MPA data showed.