Hi-5 spread widens versus last week as HSFO softens

Asia’s hi-5 fuel oil spread widened by over 2% week-on-week, reflecting a softer market for high sulphur fuel oil (HSFO), while the very low sulphur fuel oil (VLSFO) market trended steady to slightly firmer this week.

The premium of VLSFO over 380-cst HSFO, also known as the hi-5 (FO05-380SGMc1), closed at more than $100 a metric ton on Friday, based on LSEG data at Asia close (0830 GMT).

The spread, which can affect bunkering economics, has been hovering at narrower premiums of below $100 between late-2024 and early-2025.

Meanwhile, cash premiums for VLSFO and HSFO were largely stable on Friday due to thin trading momentum, while fuel oil margins held rangebound versus the previous week.

Singapore 380-cst HSFO cracks (FO380DUBCKMc1) closed at discounts of about $5.70 per barrel, while VLSFO cracks (LFO05SGDUBCMc1) closed near premiums of $10.50 per barrel.

INVENTORY DATA

– Fuel oil inventories in the ARA (STK-FO-ARA) fell 1.2% to 1.46 million tons in the week to Jan. 9, data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices rose on Friday and were on track for a third straight week of gains with icy conditions in parts of the United States and Europe driving up fuel demand.

– The Caspian Pipeline Consortium, which exports Kazakhstan’s oil via the Black Sea, was seen pumping 64.4 million metric tons of oil in 2024 in a latest estimate, further downgrading its exporting prospects, according to a shareholder.

– Pipeline operator Kinder Morgan Inc said that two of its fuel pipelines in Los Angeles have been shut since Jan. 8 due to power outages, as the most destructive wildfires in the city’s history continued to burn uncontained on Thursday.

– The U.S. Senate energy committee will hold nomination hearings for President-elect Donald Trump’s picks for energy roles on Tuesday and Wednesday next week, the panel’s chairman Senator Mike Lee said on Thursday.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: No trade
Source: Reuters