Specifically, the trend is estimated to stay for the rest of 2020, boosting Asian refiners to focus on VLSFO production along with petrochemical feedstock naphtha, where demand has also increased.
According to Reuters, the front-month VLSFO crack was at $9.43 per barrel above Dubai crude on 3 November, its highest since April 10.
“0.5% (VLSFO) has no doubt been the strongest part of the barrel this year,” …as Matt Stanley, Dubai-based oil broker at Starfuels told Reuters.
In comparison to other refined fuels such as gasoline, gasoil and jet fuel, which have been impacted by mobility bans imposed during the pandemic, residue fuel demand in shipping and power generation has been relatively resilient.
“Both the high-sulphur fuel oil (HSFO) and VLSFO markets will continue to remain tight over November and December”… said Sri Paravaikkarasu, director for Asia oil at FGE.
Concluding, the world’s largest bunkering hub Singapore posted a 6% rise in total marine fuel sales in the first nine months this year.