Cracks for high sulphur fuel oil (HSFO) hit fresh highs in Asia on Friday, though spot benchmarks remained capped.

The 380-cst HSFO/Brent crack for June hit a premium of about $3.70 a barrel at the Asia close, the highest on record, LSEG data showed. Meanwhile, the 380-cst HSFO/Dubai crack for June closed at a premium of $4.45 a barrel.

Cracks have been supported due to expectations of seasonal market strength and lower crude oil prices recently.

However, spot benchmarks remained capped, with cash differentials still hovering near parity to cargo quotes as prompt supplies remained ample, market sources said.

Meanwhile, the very low sulphur fuel oil (VLSFO) market retained strength, with cash differentials closing the trading week at premiums above $11 per metric ton.

VLSFO cracks for June (LFO05SGBRTCMc1) dipped slightly below premiums of $13 a barrel, LSEG data showed.

BUNKER SALES

Marine fuel sales at the United Arab Emirates’ Fujairah port reached more than a year’s high in April, extending recovery for a second straight month, latest data showed.

Bunker demand at Fujairah has recovered in March and April after a slump in February, though some trade sources said that demand was looking slightly tepid in May so far.

INVENTORY DATA

– ARA fuel oil inventories (STK-FO-ARA) slipped 5.0% week-on-week to 1.09 million tons in the week to May 15, based on data from Dutch consultancy Insights Global.

OTHER NEWS

– Oil prices extended declines on Friday under increased supply pressure from an OPEC+ output hike and the prospect of an Iranian nuclear deal, yet are heading for a second consecutive weekly gain due to easing U.S.-China trade tensions.
– World oil supply will rise more rapidly than previously expected this year as Saudi Arabia and other OPEC+ members unwind output cuts, the International Energy Agency said on Thursday, despite a lower forecast from U.S. shale producers.

– U.S. oil producer Chevron Corp and several European companies are in talks with the Trump administration to obtain authorizations to keep their stakes in joint ventures with Venezuela’s state-run PDVSA, sources close to the matter said.
– Lotte Chemical plans to start operations at its new cracker in Indonesia in the second half of 2025, an executive at Lotte’s Malaysia affiliate said on Friday.

WINDOW TRADES

– 180-cst HSFO: No trade
– 380-cst HSFO: One trade
– 0.5% VLSFO: No trade

Source: Reuters