Asian fuel oil cracks wilt as Fujairah stocks hit 9-month high

London (Quantum Commodity Intelligence) - Refining margins for fuel oil in Asia have dipped 8% over the course of the month amid a build-up in stocks at the Middle-Eastern bunkering hub of Fujairah in the Middle East.

According to data released Wednesday by Fedcom and Platts, fuel oil stocks at the UAE hub are at a nine-month high after chalking up a 16.4% weekly increase to 15.075 million barrels on April 26.

That contributed to an overall supply-heavy picture that has pushed overall stocks to a near three-month high of 23.276 million barrels.

Total stocks were last higher on February 1 at 23.282 million barrels when fuel oil only accounted for 10.780 million barrels.

Fuel oil cracks for 380 cst were -$6.83/b FOB Singapore by 16.30 Singapore time, down from -$6.33/b a month earlier, according to Quantum data.

And while fuel oil stocks fell, light and medium distillate inventories fell.

For the week ending April 26 light and medium distillate stocks were 5.256 million and 
2.945 million barrels respectively, representing week-on-week drops of 4.1% and 8.8%.

The May crack for Jet Kero FOB Singapore has tripled over the same time period to $3/b today as expectations of rising air passenger numbers in the coming months has driven the market into a strong contango.

Diesel 10ppm FOB Singapore has also gained 31.5% to plus $4.51/b at today's close.