Singapore's commercial onshore residue stocks fell 4.7% week on week to 22.821 million barrels, or 3.59 million mt, in the week to July 7, the Enterprise Singapore data released late July 8 showed, amid firm demand and lower imports.

The stocks were the lowest since March 24, when 22.311 million barrels of stocks were recorded, according to the data.

Bunker demand in the world's largest bunkering hub of Singapore has been better-than-average to rather firm, especially for a majority of the last couple of weeks, traders said.

A rising flat price due to a firming crude amid the uncertainty that surrounded the outcome from the recent OPEC+ meeting had led most buyers to come in and meet their requirements on fears that flat price may continue to rise, traders said.

A narrowing spread in the recent days between the prices of marine fuel 0.5%S bunker in Singapore and Zhoushan had also led more buyers to prefer to bunker in the city-state, traders added.

In the first four trading days of the week ending July 9, the price of IMO-compliant marine fuel delivered in Zhoushan has, on average, been $1.63/mt higher than the same grade in Singapore. In contrast, prices in Zhoushan were $1.4/mt lower than that in Singapore in the previous trading week, S&P Global Platts data showed.

A firming demand had indeed led the premium for Singapore-delivered marine fuel 0.5%S bunker over Singapore marine fuel 0.5%S cargo to firm up to a seven-week high of $7.38/mt on July 5. A less-than-robust demand in the last couple of trading days amid a slump in flat price has led the differential to inch lower to be assessed at $4.92/mt on July 8.

Singapore fuel oil imports dip on week

Meanwhile, Singapore's fuel oil imports declined week on week, which also contributed to the decline in stocks. Singapore's fuel oil imports fell 1.3% to 967,590 mt in the week of July 1-7, the data showed.

Traders said the inflow of arbitrage cargoes from the West in July is largely similar to June at around 2.2 million-2.3 million mt, while the volume is in the lower side of the range of 2 million-3 million mt for typical monthly inflow.

Imports from the Middle East saw the biggest week-on-week drop in the week to July 7, falling 57.1% to 156,430 mt, according to the data. The Middle East is a source of high sulfur fuel oil cargoes, market sources said.

A bulk of the imports from the Middle East came from the UAE at 156,029 mt of fuel oil sent to Singapore in the week, up 48.7% from a week earlier, according to the data. There were no imports recorded from Iraq in the week, which is one of the largest exporters to Singapore among the Middle Eastern countries.

On the other hand, imports from Asia also declined 23.5% on the week to 282,862 mt over July 1-7, as imports from Malaysia dropped 14.5% on the week to 249,937 mt in the week, the Enterprise Singapore data showed. Bunker suppliers typically transport finished bunker fuel from floating storage parked at Tanjung Pelepas in Malaysia to onshore tanks in Singapore before delivery to ships, market sources said.

Imports from Brazil rose 24.9% from a week earlier to 80,329 mt in the week to July 7, the data showed. Brazil is the biggest supplier of low sulfur fuel oil components to Asia, market sources said.

On the other hand, Singapore exported 222,930 mt of fuel oil over July 1-7, down 37.8% on the week, the data showed.

Singapore recorded no exports to Hong Kong in the week, compared with 59,999 mt exported in the week of June 24-30, the data showed. Exports to Bangladesh also dropped 19,012 mt over July 1-7, down 65.5% week on week, as the country's fuel oil consumption was hit by a sluggish economy.