The Asia fuel oil market experienced stable spot benchmarks as of Friday, with trade remaining thin. Despite the lack of significant movement in the spot market, refining margins posted notable weekly increases following a sharp decline in crude prices throughout the week.
Sources in the industry reported that cash differentials for very low sulfur fuel oil (VLSFO) maintained narrow premiums over cargo quotes, while bunker premiums showed a slight improvement. In contrast, the cash differentials for 380-cst high sulfur fuel oil (HSFO) continued to reflect discounts after a significant downturn earlier in the week.
Market observers noted that Asia is expected to have a robust supply of blendstock components this month, which could influence price stability. Nonetheless, refining margins have shown resilience, primarily due to the recent drop in crude prices.
Recent data indicated that VLSFO cracks for May closed at approximately $8.30 a barrel on Friday, representing a 10% increase compared to the previous week. Conversely, the 380-cst HSFO cracks registered discounts near $1.90, which is a rise of over 40%.
In terms of inventory, ARA fuel oil stocks decreased by 5.2% to 1.03 million tons for the week ending April 3, according to Dutch consultancy Insights Global. On the broader market front, oil prices fell more than 1% on Friday and appeared to be heading towards their worst weekly performance in months.
This decline was fueled by U.S. President Donald Trump’s new tariffs, raising concerns about potential impacts on global oil demand. Furthermore, eight OPEC+ nations have recently agreed to accelerate their plan for phasing out oil output cuts, contributing to the volatility in oil prices.
In a more localized context, India’s gasoline consumption is predicted to peak by 2035, as the demand for cleaner fuels increases, as stated by a Reliance Industries executive. Additionally, PBF Energy plans to restart several refinery units at its Martinez facility after recent shutdowns due to a fire in February.