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2026-02-13 22:05:16
[Asian Oil Market: Low-Sulfur Fuel Oil Recovers, High-Sulfur Fuel Oil Strengthens; Gasoline Crack Spread Plunge 21% This Week] ⑴ The Asian ultra-low sulfur fuel oil market saw a slight backwardation on Friday, after having been in contango since early February. Although barge capacity constraints pushed up marine fuel premiums earlier this month, the market remains constrained by an overall ample supply outlook. The March spot spread continued to trade at a discount, but narrowed slightly on Friday. ⑵ High-sulfur fuel oil spreads continued to widen, despite a weakening market structure this week. Against the backdrop of a slight recovery in ultra-low sulfur fuel oil, the Hi-5 spread rebounded to around $50 per tonne on Friday, widening from last week. ⑶ Fuel oil crack spreads strengthened, with 380-cst high-sulfur fuel oil closing at a discount of approximately $2.35 per barrel, and low-sulfur fuel oil rising to a premium of approximately $5.25 per barrel. No transactions were recorded in the Singapore window. ⑷ The diesel market remained largely stable, but crack spreads declined from the previous day. The 10ppm diesel spot price spread remained stable to slightly higher, with some early March cargo bids strengthening. The diesel crack spread closed at around $19.50 per barrel, down from last week. (5) The jet fuel inter-month spread stabilized on Friday after fluctuating during the week, with the jet fuel/diesel spread widening to a discount of 74 cents per barrel. No transactions were recorded in the Singapore window. (6) The gasoline crack spread plummeted to about $4 per barrel, a significant narrowing from $6.06 the previous day, with a cumulative decline of about 21% this week. Rising inventories in Singapore and the United States, coupled with increased arrivals in China and South Korea in January and lower-than-expected demand, jointly pressured profits. (7) The naphtha crack spread fell by about $1 to $98.65 per ton. One gasoline transaction was recorded in the window. (8) From a supply and demand perspective, the recovery in low-sulfur fuels is limited by ample supply, while the strengthening of high-sulfur fuels reflects structural tightness. The sharp drop in gasoline prices suggests that weak end-user demand has been transmitted upstream, and refining profits face the risk of further compression.
