Asian fuel oil volatile on low grades, tight storage

SINGAPORE: Poorer quality fuel oil flowing into this region and limited storage space are expected to spark wild price swings in Asia this year and could lead to sudden supply disruptions.

The problem will last until additional tank capacity is available by the end of the year, offering traders more space to blend cargoes that do not meet industry specifications into retail-grade quality, industry sources said.


In a sign of things to come, Asian premiums for fuel oil cargoes hit record-highs in early February, as bad weather hampered loadings in Europe while limited storage in Singapore curbed blending operations, before they slid just as abruptly.