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[Asian High-Sulfur Fuel Oil Market Retreats from Highs, Crack Spreads Plunge, Supply Outlook Remains Divergent] ⑴ The Asian high-sulfur fuel oil (HSFO) derivatives market saw a sell-off on Friday, ending a week of volatile gains. The February 380-cst HSFO crack spread against Brent crude oil fell more than 15% intraday to a discount of $7.75 per barrel. ⑵ This crack spread touched a more than seven-week high on Wednesday before plummeting, reflecting significant market volatility as traders closely monitor a complex supply outlook. ⑶ Traders are divided on Asian market supply, with some anticipating tighter supplies due to increased Venezuelan oil flowing to the US Gulf Coast, while others believe supplies from other producing regions remain ample. ⑷ Market expectations of weakness in the US market pushed the 380-cst HSFO East-West spread to an eight-month high in early trading on Friday, before giving back some of those gains later in the day. (5) Meanwhile, the Asian HSFO spot price spread remained at a discount at the end of the week, while the VLSFO price spread held steady at near parity with cargo prices, with its crack spread falling back to a premium of approximately US$3.20 per barrel. (6) Inventory data showed that fuel oil inventories in the Amsterdam-Rotterdam-Antwerp (ARA) region of Europe fell by 3.5% to 1.07 million tons in the week ending January 8. (7) Oil prices rose for the second consecutive day on Friday, gaining more than 1%, and are on track for a third consecutive weekly gain, mainly supported by uncertainty over Venezuelan supply prospects and supply concerns stemming from the situation in Iran. (8) Other related developments include: Reliance Industries of India stated that it would consider purchasing Venezuelan oil if granted permission, and Marathon Oil of the United States also expressed interest in bidding for Venezuelan crude oil.