Onshore fuel oil inventories in Singapore, a key trading hub, have seen a rise for the second consecutive week, largely attributed to significant inflows from the Middle East. Data released on Thursday indicated that residual fuel inventories reached 22.9 million barrels, approximately 3.6 million metric tons, in the week ending April 16, as reported by Enterprise Singapore. This figure represents a 3.9% increase from the previous week, marking the highest inventory levels in 17 weeks and exceeding typical weekly averages. The primary sources for this influx of fuel were Iraq, the United Arab Emirates, and Kuwait.
Ship-tracking data revealed that not only did Middle Eastern supply to the Asia region surge last month, but there was also a firming of western and regional supplies. Attractive pricing for high-sulphur fuel attracted more shipments during this period, although there has been a slight decline in volumes for April compared to March. In terms of outflows, most fuel oil from Singapore’s onshore tanks has been directed towards the Philippines and China, with the exception of movements to storage facilities in Malaysia. In recent days, the high-sulphur fuel oil spot market has encountered pressure, while the low-sulphur fuel oil market remained relatively stable.
Emril Jamil, a senior analyst at LSEG Oil Research, noted that Singapore’s onshore residual stocks have remained above 3 million tons since mid-March, driven by strong arrivals in March amid declining maritime fuel demand. He highlighted that this accumulation of onshore stocks, coupled with weaker demand, has dampened the premiums for high-sulphur bunker fuels.