Asia, European fuel oil cracks rebound as Singapore, UAE stocks fall

London (Quantum Commodity Intelligence) - Cracks for European and Asia high sulfur fuel oil (HSFO)  inched higher again Thursday morning as the refining margin corrects from a long slide since late April, broker data shows.

June paper cracks for HSFO barges in ARA were trading around -$10.9/b at the time of the Singapore market close at 0930 UK time, up $0.2/b from 1630 UK time Wednesday.

July paper cracks were trading around -$10.50/b, up $0.16/b over the same time frame.

And in Asia, 380cst cracks for June and July paper versus the relevant cash Brent contract dipped $0.75/b and $1/bl by 0930 London time (1630 Singapore time) to -$10.11/b and -$9.44/b, Quantum dta showed.

The spread between HSFO barges and marine fuel (0.5% sulfur) barge paper in ARA was steady Thursday morning, with June pegged at $106/mt and July at $105/mt.

The same spread for Asia cargoes FOB Singapore, however has come in from $118/mt on Tuesday to $115/mt by Thursday. Wednesday was a Singapore national holiday.

Bulging stocks in Singapore and Fujairah at the end of April triggered a collapse in HSFO barge cracks from around -$7.50/b on April 22 to a low of -$12.50 on May 18, Quantum data shows.

But the spot and nearby paper barge cracks have staged a recovery this week as inventories have declined.

Stocks of residual fuels in Singapore fell 2.1 million barrels, or 8%, over the week to May 26 to stand at 22.8 million barrels.

Residual stocks in Fujairah were down 1.7 million barrels over the week to May 24 to stand at 11.87 million barrels, according to S&P Global Platts.