May 19, 2022

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The Car & Automotive Devotees

Asia Fuel Oil VLSFO cracks dip, cash premiums plunge to lowest in a week

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SINGAPORE, Feb 23 (Reuters) – Asia’s front-month crack for 0.5% very low-sulphur fuel oil (VLSFO) slipped on Wednesday, while cash premiums for the marine fuel grade dropped to their lowest in a week amid muted cargo demand in the physical trade window.

The front-month VLSFO crack fell to $19.60 per barrel against Dubai crude during Asian trading hours, down from $20.37 per barrel a day earlier.

The VLSFO crack, however, has gained about 16% in the last month, partly due to lower arbitrage flows from the West in recent weeks, Refinitiv data showed.

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Cash premiums for Asia’s 0.5% VLSFO dropped to $16.61 a tonne to Singapore quotes on Wednesday, the lowest since Feb. 16. They were at a premium of $17.68 per tonne on Tuesday.

Meanwhile, Asia’s cash premiums for 380-cst high sulphur fuel oil (HSFO) dropped for a sixth consecutive session to 92 cents per tonne to Singapore quotes, weighed down by adequate supplies. They were at $1.50 a tonne in the previous session.

“HSFO supply to East Asia remains ample, with Middle Eastern inflows climbing on-month in February and breaching 2021’s average of 2.45 million tonnes per month,” Refinitiv Oil Research analysts said in a weekly note.

“The climb was led by a rebound in UAE exports, following a period of slowdown due to bad weather and logistical bottlenecks.”

INVENTORIES

– Fujairah Oil Industry Zone (FOIZ) inventories for heavy distillates and residues rose 36.8% from the previous week to 10.5 million barrels (1.6 million tonnes) in the week ended Feb. 21, data via S&P Global Platts showed.

– Compared with year-ago levels, the weekly fuel oil inventories at FOIZ were about 5% lower.

– Fuel oil stocks at FOIZ averaged 9.9 million barrels so far this year, compared with a weekly average of 10.3 million barrels in 2021, Reuters calculations showed.

GREEN ENERGY

– India could become a global green energy superpower with exports of clean energy rising to $500 billion over the next 20 years, Mukesh Ambani, chairman of oil-to-telecom conglomerate Reliance Industries, said on Wednesday. read more

– Indian companies including Reliance have announced plans worth billions of dollars to boost India’s renewable energy capacity including building battery storage, fuel cells and producing green hydrogen at less than $1 per kilogram.

WINDOW TRADES

– No high-sulphur fuel oil (HSFO) deals, nO VLSFO trades

OTHER NEWS

– Oil prices fell on Wednesday, retreating from seven-year highs hit the previous day as it became clear that the first wave of U.S. and European sanctions on Russia were unlikely to disrupt oil supplies.

– Vietnam will auction 100 million litres (26.4 million gallons) of gasoline from its national reserves, state media reported on Tuesday, as a supply shortage enters its second month. read more

ASSESSMENTS

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Reporting by Koustav Samanta; Editing by Amy Caren Daniel

Our Standards: The Thomson Reuters Trust Principles.

https://www.reuters.com/markets/asia/asia-fuel-oil-vlsfo-cracks-dip-cash-premiums-plunge-lowest-week-2022-02-23/