Asia fuel oil margins for both low-sulphur and high-sulphur grades rose this week, driven by prospects of demand from bunkering.

Shipping route diversions are expected to support global bunker demand globally. Reflecting this, bunker premiums for the flagship 0.5% very low sulphur fuel oil (VLSFO) have shown signs of firming, trade sources said.

Cargo cash premiums for VLSFO climbed to $7.65 a metric ton on Friday, while cracks rose more than 40% from last week, as per LSEG data.

High-sulphur benchmarks also firmed, though to a lesser extent. The 380-cst cash premium FO380-SIN-DIF rose to $4.25 a metric ton on Friday, while cracks firmed about 8% from last week.

Onshore stockpiles have fallen at key bunker hubs Singapore and Rotterdam this week, latest data showed.

INVENTORIES

ARA inventories fell 4.6% week-on-week to 1.379 million tons in the week to Jan. 18, after hitting more than two-year highs last week, data from Dutch consultancy Insights Global showed.

OTHER NEWS

– Oil prices rose on Friday as Middle East tensions and oil output disruptions caused by cold weather in the U.S., the world’s biggest producer, overshadowed concerns about the health of the Chinese and global economy.

– The U.S. Treasury on Thursday said it imposed sanctions on a United Arab Emirates-based shipping company for violating the $60-per-barrel price cap on Russian crude oil exports in its first such enforcement action this year.

– Two oil tankers that had diverted away from the Red Sea have turned back and passed through the Bab al-Mandab Strait, ship-tracking data showed, though tensions in the region continued to disrupt global shipping and trade.

– Nigeria backs Shell’s decision to sell its onshore oil and gas assets, its junior oil minister said, and will give the necessary regulatory approval.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: No trade
– 0.5% VLSFO: Two trades
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)