- Singapore's residue stocks edge up 1% to 7-week high, bunker demand stable
Singapore's commercial onshore residue stocks inched up 0.8% week on week to 24.237 million barrels in the week ended Oct. 7, Enterprise Singapore data showed, edging up for the fourth straight week to a seven-week high as imports continued to outpace exports, while bunker demand remained stable.
Stocks were last higher Aug. 19 at 25.485 million barrels, historical data showed.
Fuel oil imports fell 54.6% in the week ended Oct. 7 to 488,596 mt, while fuel oil exports fell 33.6% to 231,766 mt, the data showed. High sulfur fuel exports to Saudi Arabia and Bangladesh typically ease after the peak summer demand season.
There were no fuel oil exports to Saudi Arabia, New Caledonia or South Korea in the week, while volumes to Bangladesh, a regular buyer of Singapore fuel oil for both power and bunkering, fell 64.2% to 40,203 mt. Exports to Malaysia fell 44.6% on week to 28,064 mt, the data showed.
Fuel oil imports were likely to decline in October from September as Asian prices were relatively weak when October-arrival cargoes were traded, traders said.
Imports from most regions fell over Oct. 1-7, while a 41,105 mt shipment arrived from Algeria in the week after no arrivals from Africa the week before.
There were no imports from the Americas in the week, while arrivals from the Middle East fell 62.8% to 49,824 mt, all from Iraq, which typically supplies straight-run fuel oil.
Arrivals from Europe fell 69.8% on week to 42,984 mt, all of it from Italy and the UK, while intra-Asian arrivals, which comprise most of Singapore's imports, fell 46.7% to 308,637 mt on the back of a 52.8% fall in imports from Malaysia to 212,635 mt, the data showed.
BUNKER DEMAND STABLE
Demand for low sulfur bunker fuel in Singapore was largely stable in the week to Oct. 7 from the week before, traders said.
A Singapore-based bunker trader said he had received more inquiries for low sulfur marine gasoil the previous week as its premium to low sulfur fuel oil had narrowed, but demand had tapered off in the week to Oct. 7, even though the spread had narrowed further.
"Most of our inquiries this week are for LSFO," the trader added.
LSMGO averaged $5.50/mt higher than LSFO over Oct. 5-8, S&P, narrowing from $8.20/mt in the week to Oct. 2, S&P Global Platts data showed.
Market participants said demand shift to LSMGO from LSFO was limited as buyers do not typically inquire after LSMGO unless supply of LSFO was tight. This occurred during the IMO 2020 transition in January when LSFO was scarce.
"We don’t necessarily have to buy LSMGO just because the spread is narrowing. We usually opt for LSFO first," a shipowner said.