Asian high sulfur fuel oil cracks rise for the 6th session on thin Iran supply
London, (Quantum Commodity Intelligence) – High-sulfur fuel oil cracks in Singapore rose for the sixth straight session on Thursday, with flat prices outstripping firmer crude for over a week on strong demand and a lighter crude complex.
The 380cst 3.5% paper crack FOB Singapore versus frontline cash Brent rose for July to -$8.08/b on Thursday, 25% up in just six trading sessions.
The rise came amid a likely delay to the return of heavy Iranian sour barrels to the market after a deal to boost Iranian supply stalled.
The rise in cracks reflects the changing structure of the swaps curve, as a -$2/mt contango from June/August 10 days ago has flattened to just -$0.25/mt, according to Quantum data.
The rise in 3.5% higher sulfur swaps helped marine fuel 0.5% cracks firm on 6.9 density basis, with July cracks versus September cash Brent rising to $3.95/b, the second highest level since May 12, when talks over Iranian supply looked more positive.
The rise in fuel oil cracks have occured despite a 23% stock build last week in residual stocks in Fujairah, the Middle-East bunkering hub and a 12% rise in stocks for bunkers in the Asian hub of Singapore.
