Spread or differential is simply the difference between price paid or received for oil in comparison to the benchmark oil. Asia’s cash differential for 380 cSt high sulphur fuel oil (HSFO) narrowed down to smaller discounts but the bearishness limit the market recovery. The VLSFO (Very low sulphur fuel oil) firmed slightly on Wednesday with widening backwardation.
Chinese demand for HSFO is likely to be low as inventory levels likely to be high. On the other hand, HSFO stocks are expected to hit Asian markets after Russian refineries resumed their production after seasonal maintenance. Singapore’s 0.5 % VLSFO cash premium rose yesterday.
Crude markets demonstrated downside momentum on bearish weekly numbers that fanned demand fears. FO prices in India are very likely to be revise down on 16-10-2023