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Singapore fuel oil stockpiles slide to nearly six-year lows

Fuel oil volumes stored in onshore tanks at key trading hub Singapore fell to their lowest in nearly six years, weekly official data showed on Thursday.

The stockpiles were at 15.53 million barrels (about 2.92 million metric tons) in the week to Sept. 25, sliding 16% from the previous week, and last seen lower in late-October 2018, based on data from Enterprise Singapore. O/SING1

Inventories of fuel oil have trekked lower in recent months due to tighter incoming supplies to Asia.

Onshore fuel oil stockpiles averaged 17.42 million barrels per week in September so far, compared with an average of 18.81 million barrels in August and 19.39 million barrels in July.

Firm bunkering demand for high sulphur fuel oil (HSFO) also drove more sales of oil from sellers with cargo availability, some trade sources said.

The recent drop also emerged amid a steadily backwardated market, in which the spot price of the fuel is higher than its future price.

Singapore’s balance-September/October timespread for 0.5% low sulphur fuel oil held above $10 per ton this week, based on LSEG data, while the October/November timespread was pegged at $11.75 per ton, fuel oil brokers said on Thursday.

Spot premiums for VLSFO reached their highest in more than nine months in early-September amid tighter supplies and blending components for marine fuels, while premiums for 380-cst HSFO hit more than a year’s high near mid-September.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Mrigank Dhaniwala)

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