Singapore gasoil-fuel oil bunker spread widens

Singapore gasoil-fuel oil bunker spread widens

Singapore, 20 October (Argus) — The premium of low-sulphur marine gasoil (LSMGO) bunkers in Singapore has risen to record levels over very-low sulphur fuel oil (VLSFO) grade bunkers, reaching an average of $100/t so far in October.

Gasoil prices have spiked in recent weeks in line with LNG spot prices because of a shortage of gas in Asia and Europe, as refiners are maximising the production of middle distillates that can also be used for heating purposes.

Gasoil crack spreads as a result are outpacing that of other refined products, especially relative to residue products. Front-month gasoil crack spreads in Singapore averaged $14.70/bl in October, up significantly from $10.40/bl in September, according to Argus data. This compares with VLSFO margins of $10.90/bl in October, down from $11.20/bl in September.