Asia fuel oil market structure eases as timespreads sell off
USO•Asian fuel oil timespreads for high-sulphur and very low-sulphur fuel oil fell on Monday, while both markets remained in backwardation into year-end. The 380-cst HSFO crack held near a $3.45-per-barrel premium, and the VLSFO crack stayed above a $23 premium.
1. Timespreads weaken
Fuel oil market structure softened at the Asia close on Monday as timespreads for high-sulphur fuel oil and very low-sulphur fuel oil sold off. Both markets remained in relatively strong backwardation into year-end, reflecting uncertainty over product outflows, with US-Iran peace talks deadlocked.
2. Cracks and cash values
Fuel oil cracks largely held last week's strength. The 380-cst HSFO/Brent crack was steady near a $3.45-per-barrel premium, while the VLSFO crack dipped slightly but remained above a $23 premium. Cash differentials were slightly lower than the previous trading day, and the prompt hi-five spread slipped to about $125 per metric ton.
