Singapore fuel oil stocks at three-week lows as net imports ease
Residual fuel oil stocks at key trading hub Singapore slipped to three-week lows, with net imports retreating after last week’s jump, official data showed on Thursday
Onshore fuel oil stocks fell 9.5% to 19.77 million barrels (3.11 million metric tons) in the week to Sept. 27, Enterprise Singapore data showed.
Weekly net imports, calculated by subtracting total exports from total imports, eased 17.3% from last week at 834,000 tons.
Brazil was the top origin for Singapore’s fuel oil imports at 252,000 tons, with imports up for a second straight month.
Imports from Turkey, which last emerged in early August, appeared at 111,000 tons in the week.
Meanwhile, total fuel oil exports from Singapore fell 15.3% from last week. Bangladesh was the top destination for fuel oil exports, at 45,000 tons.
Recent strength in the fuel oil market structure could spur more inventory clearance as firmer backwardation discourages oil storage economics.
In a backwardated market, front-month prices are higher than those in the future months.
The backwardation timespread for 0.5% very low sulphur fuel oil has widened to a three-month high this week, hitting about $15 a ton on Thursday.
“If gains from punts on the market’s structure fail to offset costs, the steep backwardation will disincentivise storage and force more volumes into the market,” said LSEG Oil Research in a report this week.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by Varun H K)