Asia fuel round up: Low sulfur fuel oil cracks slip as stocks rise

23 Jul 2021

Quantum Commodity Intelligence – Marine fuel oil cracks slipped $0.80/b over the course of the week, reversing a six-week run for fuel oil that has seen cracks improve on shrinking Chinese exports, as flat prices fell and crude broadly flatlined.

Stocks of fuel oil in the bunkering hub of Singapore have risen to a six-week high in a dynamic that has pressured cracks.

Flat prices were assessed at $528.50/mt FOB Singapore, down $6/mt on the week as cash differentials fell to around $1/mt, which is where the last trades were recorded.

With Zhoushan bunkers uncompetitive versus Singapore, sources say demand would be expected to be better in the regional Singapore market.

Conversely, high sulfur crude oil cracks have risen marginally over the last week from -$9.65/b to -$9.33/b FOB Singapore.

With a flat price of $407.75/mt FOB Singapore, the spread between the two grades has narrowed to $121/mt from $128/mt, as higher sulfur sales take up a bigger share.