Asian benchmark 180-centistoke fuel oil rose to a record on higher benchmark Dubai crude and lower supplies in the Middle East after Iran cut exports. The price of 180-centistock fuel oil for immediate delivery in Singapore rose $4.75, or 1.2%, to $413.75 a metric ton, according to data compiled by Bloomberg. The price of 380-centistoke fuel oil, mainly used as marine fuel, gained $6.5, or 1.6%, to $405.50 a ton.
Dubai crude jumped $2.05 a barrel, or 2.8%, to $74.60 a barrel, Bloomberg data showed. Iran has cut fuel oil exports to Fujairah, the Middle East’s biggest bunkering port that sells around 700,000 metric tons a month, to as low as 180,000 tons in August from typical monthly shipments of around 300,000 tons, traders said.
The lack of supplies at Fujairah prompted traders to import fuel oil from Asia and Europe, pushing prices in those regions higher.
“Traders are moving cargoes from Asia to ease supply tightness at Fujairah,” said Kazuto Ishida, a fuel oil trader at Tokyo-based Hanwa Co. “Tightness can always hit Fujairah port again when imports from the region slow.”
Residue stockpiles that include fuel oil in Singapore dropped 1.87mln barrels, or
14%, to an 11-week low of 11.11mln barrels in the week ended Wednesday, according to data compiled by International Enterprise Singapore, a unit of the trade ministry.
Fuel oil’s discount to Dubai crude oil, known as the crack spread, widened to $10.452 a barrel from $9.139 on Thursday, according to Bloomberg data.
The differential is a measure of profit or loss from processing Dubai crude.