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Asia Fuel Oil-HiLo spread widens to record high on VLSFO strength

Reuters SG
·2-min read

SINGAPORE, June 30 (Reuters) - Asia's high-low (HiLo) sulphur fuel oil spread widened to a record high on Thursday, driven by strong fundamentals in the very low sulphur fuel oil (VLSFO) market. The front-month HiLo spread, which is the price difference between front-month 0.5% VLSFO and 380-cst high-sulphur fuel oil (HSFO) swaps, climbed for a fifth straight day to a fresh high of $387.00 a tonne on Thursday, Refinitiv data showed. The HiLo spread last hit a record high of $371.50 a tonne on June 9. The VLSFO market has retained strength on tight supply and steady bunkering demand, while HSFO lagged in recovery. The 0.5% VLSFO cash differential was at a premium of $77.14 a tonne on Thursday, Reuters data showed. The differential climbed sharply to average $70.30 in June versus $37.33 in May. Meanwhile, the 380-CST HSFO differential was at a discount of $1.41 a tonne on Thursday. The differential, which has sunk into a discount as the month ends, averages at a premium of $0.20 in June, sliding from $7.42 in May. SINGAPORE INVENTORIES Singapore fuel oil inventories dipped 3% to a two-week low of 21.348 million barrels in the week to June 29, data from Enterprise Singapore showed. OTHER NEWS - Oil prices traded sideways on Thursday as the market weighed concerns of global supply and a build in U.S. fuel product inventories. - OPEC+ enters a second and final day of meetings on Thursday with sources saying the group is unlikely to decide imminently to pump more barrels to the market beyond August. - Japan's electricity grid creaked on Thursday under the strain of Tokyo's hottest June on record, with the unexpected shutdown of a power plant raising fears that tens of millions of people could be deprived of power on another scorching day. WINDOW TRADES - HSFO: No trade - VLSFO: One 0.5% VLSFO trade ASSESSMENTS FUEL OIL CASH ($/T) ASIA CLOSE Change Prev RIC Close Cargo - 0.5% VLSFO 1017.65 11.29 1006.36 Diff - 0.5% VLSFO 77.14 -0.26 77.4 Cargo - 180cst 594.02 -28.45 622.47 Diff - 180cst -1.43 -0.60 -0.83 Cargo - 380cst 569.85 -16.23 586.08 Diff - 380cst -1.41 -0.06 -1.35 Bunker (Ex-wharf)- 380cst 573.50 -16.50 590.00 Bunker (Ex-wharf) Premium 3.65 -0.27 3.92 For a list of derivatives prices, including margins, please double click the RICs below. Brent M1 180cst M1 180cst M1/M2 180cst M2 Visco M1 Visco M2 380cst M1 380cst M1/M2 380cst M2 Cracks 180-Dubai M1 Cracks 180-Dubai M2 East-West M1 East-West M2 Barges M1 Barges M1/M2 Barges M2 Crack Barges-Brent M1 Crack Barges-Brent M2 (Reporting by Jeslyn Lerh; Editing by Vinay Dwivedi)