Asia’s high sulphur fuel oil (HSFO) cracks posted a weekly drop as the market has been under pressure after seasonal demand eased, while global supply is expected to pick up after Russian refineries emerge from maintenances.

The crack for 380-cst HSFO slipped to a discount of $14.96 a barrel at the Asia close, edging lower by 9% from last week, according to LSEG data.

Reflecting weak fundamentals, cash differentials for 380-cst HSFO remained in discounts through the week.

In contrast, the very low sulphur fuel oil (VLSFO) market staged a slight recovery as spot-buying interest picked up slightly.

The Singapore 0.5% cash differential closed at a premium of $17.45 a ton on Friday, while refining crack rose to a premium of $10.79 a barrel.

ARA INVENTORIES

Inventories at ARA rose 4.1% to 1.08 million tons in the week ended Oct. 12, rebounding after hitting nine-month lows, latest data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices jumped on Friday after the U.S. tightened its sanctions programme against Russian crude exports, raising supply concerns in an already tight market, and global inventories are forecast to decline through the fourth quarter.

– The U.S. on Thursday imposed the first sanctions on owners of tankers carrying Russian oil priced above the G7’s price cap of $60 a barrel, one in Turkey and one in the United Arab Emirates, in an effort to close loopholes in the mechanism designed to punish Moscow for its war in Ukraine.

– China’s Sinopec Corp has applied to the government to swap some of its marine fuel export quotas for allowances to export light products such as diesel, jet fuel or gasoline, four China-based industry sources said this week.

– OPEC on Thursday stuck to its forecast for relatively strong growth in global oil demand in 2023 in 2024, citing signs of a resilient world economy so far this year and expected further demand gains in China.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Sherry Jacob-Phillips)