Fuel oil margins hit sticky times (see Asian Oil Monthly – Issue 1).

  • Asian fuel oil cracks have trended steadily downwards since peaking in June 2017, with weakness intensifying since the turn of the year.
  • The power generation and industrial sectors continue to move away from fuel oil use, with rising oil prices, relatively cheap natural gas, and environmental concerns the main causes.
  • Bunker demand on the other hand continues to grow strongly, boosted by strong macroeconomic performance, as demonstrated by rising container throughput at major ports.
  • Growth in bunker demand continues to just about match falling demand in other sectors, and our balances tighten again y-o-y post Q1-2018.