Chemicals Updates

Asia and Middle East Fuel Oil Daily Market Analysis / Weaker market structure driven by optimism from peace talks / LSFO cash differentials decline for fourth straight session

May 21, 2026

The Asia high sulfur fuel oil market structure further weakened April 21, while refining margins flipped back into negative, despite expectations of tightening physical supply, particularly in May. The Singapore 380 CST HSFO May-June swaps time spread was pegged at a backwardation of $26.50/metric ton in midmorning Asian trading April 21, narrowing sharply from assessment of the spread at $34/mt at the April 20 Asian close. “Everyone has placed a ‘peace’ expectation on the curve, and the liquidity is super low nowadays,” a fuel oil derivatives trader said, adding that most paper traders were taking a more cautious approach during this period of volatile pricing. The front-month Singapore 380 CST HSFO crack against prompt-month Brent crude was pegged at minus 41 cents/mt in midmorning Asian trading 21, falling from plus...

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