Singapore fuel oil stocks at 19-week high despite lower net imports

Singapore residual fuel oil inventories climbed to a 19-week high despite a dip in weekly net import volumes, official data showed on Thursday, as the Asian market remained awash with supply.

Fuel oil inventories rose for three consecutive weeks, weighing further on bearish market sentiment amid the recent slump in fuel oil cash premiums.

The inventories rose 7per cent to 22.67 million barrels (3.57 million tonnes) in the week ended Aug. 31, Enterprise Singapore data showed.

“The stocks are supported by higher Russian fuel oil flows to markets in the East, away from the West amid mounting sanctions, as well as increased regional refinery turnarounds and slowing gasoline demand which have freed up blendstock supply for export,” said Roslan Khasawneh, senior fuel oil analyst at oil analytics firm Vortexa.

Singapore’s weekly net fuel oil import volumes dipped 2per cent week-on-week to 784,000 tonnes, but averaged higher from last month. Weekly net import volumes averaged 707,000 tonnes last month, climbing from 526,000 tonnes in July, the data showed.

The largest net imports came from Malaysia at 254,000 tonnes, followed by Brazil at 138,000 tonnes. Meanwhile, the top net export destination for Singapore fuel oil was Bangladesh at 70,000 tonnes, followed by the United States at 65,000 tonnes.

Total fuel oil flows into East Asia, most of which come to Singapore, were at about 5.05 million tonnes for August, compared with 3.89 million tonnes in July, according to latest assessments by Refinitiv Oil Research.

Higher regional Asian supplies and an influx in Western arbitrage barrels have weighed sharply on the fuel oil market in recent weeks, with premiums for very low sulphur fuel oil tumbling by more than 90per cent through August.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Sherry Jacob-Phillips)