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Asian Markets See VLSFO Arbitrage November: Kpler


The Asian VLSFO complex has experienced higher levels of arbitrage inflows recently according to Kpler while the region anticipates a supply boost when Kuwait resumes exports in January.

  • Kuwait’s Al Zour began working towards full operation last week, ramping up the third and final part of the refinery for the first time according to KIPIC.
  • The refinery is set to be a major Asian fuel oil supplier, recently hit by an unplanned outage.
  • Despite a drop in Brazilian flows, Asia's arbitrage volumes firmed in November, supported by a shift in Algerian LSFO exports Kpler said.
  • Heightened Asian demand from Asia boosted the US VLSFO crack while the US HSFO crack turned to an unusual premium against Mars crude due to slowed refinery maintenance Kpler added.
  • US fuel oil inventory levels have dropped well below the five-year average in early December – see chart.

Source: Kpler/EIA

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