Onshore stocks of Singapore fuel oil rose for a second straight week despite widespread expectations of tightening supplies in July, after a stubbornly shut arbitrage window saw fuel oil flows into East Asia fell well below the 2016 monthly average.
Fuel oil inventories STKRS-SIN gained 638,000 barrels (about 95,000 tonnes) to 27.545 million barrels (4.1 million tonnes) in the week ended July 13, after rising 1.35 million barrels in the prior week, data released by International Enterprise (IE) Singapore on Thursday showed.
While the rise in stocks came as a surprise to many, some attributed the increase to abundant floating storage volumes.
"There's heaps of fuel oil floating around Singapore waters that came ashore last week and new arbitrage arrivals probably went straight to the (onshore) tanks," said one Singapore-based trader.
"Arbitrage volumes have been thin for quite some time now and I'm pretty sure it won't be too long before we start seeing notable drops in inventories," said another Singapore-based trader.
Total fuel oil flows into East Asia for July have been provisionally pegged at 3 to 3.5 million tonnes, well below the 2016 monthly average of 6.2 million tonnes and down 25 percent on month due to lower arrivals from the West and the Middle East, assessments by Thomson Reuters Supply Chain and Commodities Research showed.
FUEL OIL FLOWS
Both Singapore fuel oil imports and exports were higher in the week to July 13, rising 45 percent and 161 percent on week to 1.35 million tonnes and 0.89 million tonnes, respectively, IE data showed.
As a result of the elevated exports, net imports into Singapore were 22 percent lower than a week earlier at 0.46 million tonnes, the lowest since the week to March 23 when total net imports were just 91,000 tonnes.
Indonesia, the United States, Russia and Mexico were the top net exporters of fuel oil into Singapore, accounting for approximately 161,000 tonnes, 150,000 tonnes, 131,000 tonnes and 112,000 tonnes, respectively.
Colombia and the United Arab Emirates were among other significant net exporters, sending over 98,000 tonnes and 89,000 tonnes, respectively.
Venezuelan imports returned last week after a 70,000-tonne cargo was discharged in Singapore over the week.
Iranian fuel oil imports into Singapore were absent for the first time in seven weeks, while Saudi Arabian imports continued to elude for a sixth week running.
Malaysia, China and Bangladesh were the top export destinations for Singaporean fuel oil, with the city-state shipping 181,000 tonnes, 169,000 tonnes and 67,000 tonnes, respectively.
Source: Reuters (Reporting by Roslan Khasawneh; Editing by Subhranshu Sahu)
Source: Hellenic Shipping New