Singapore's residue stocks fall 9% on week to 22.3 mil barrels on bunker demand recovery

Singapore — Singapore's commercial onshore residue stocks fell 9% week on week to 22.329 million barrels over April 16-22, Enterprise Singapore data released late Thursday showed, due mainly to a recovery in bunker demand.

The stocks were at the lowest since touching 22.062 million barrels on February 12, the data showed. Market sources attributed the draw to stronger bunker demand as crude oil prices tumbled.

"As flat prices dropped, shipowners came back to the market in March; bunker demand in April is higher than expected," a bunker fuel trader said.

Bunker fuel demand was particularly robust on Thursday as crude oil prices staged a rebound. "Some market participants are worried that the uptrend [in prices] will continue. They missed the boat to catch the floor when bunker prices tumbled on Wednesday and they were trying to catch it on Thursday," a second bunker trader said.

One of Singapore's major bunker suppliers Ocean Bunkering Services has also disappeared from the market due to parent company Hin Leong's financial issues, which has created tightness in the delivered bunker market.

"Inquiries have been increasing since last week and it is spilling over to this week as well, especially for low sulfur bunker fuel," a bunker trader in Singapore said.

The Singapore marine fuel market has firmed in recent days as suppliers fill the void left by delivery cancellations set off by the loss of Ocean Bunkering Services, the bunkering arm of embattled oil trader Hin Leong Trading Pte. Ltd.

The Singapore-delivered Marine Fuel 0.5% bunker premium to the benchmark Singapore Marine Fuel 0.5% cargo firmed to $32.24/mt at the Asian close Thursday, and was up 336% from its all-time low of $7.39/mt on April 9, S&P Global Platts data showed.

However, the tightness in the delivered bunker market does not translate into tightness in the low sulfur fuel oil cargo market, as there is 5 million mt of LSFO stocks in floating storage around Singapore.

LSFO remains well supplied in Singapore, fuel oil traders said.

FUEL OIL IMPORTS JUMP 82%

Both fuel oil imports and exports surged over April 16-22, with imports rising 82% on week to a 2-month high at 1.32 million mt and exports surging 320% over the same period to 357,082 mt, the Enterprise Singapore data showed.

A trader in Singapore said this could be due to timing: "It's possible that some imports and exports from the previous week were not counted on the day when that week's figures are collated because a ship was discharging, so that would count towards this week's data," he said.

Imports from Europe rose 600% on week to 179,109.41 mt, largely from the Netherlands, while Iraq and Russia accounted for 131,074.08 mt and 86,709.97 mt respectively, compared with zero the week before, the data showed. Imports from Malaysia almost doubled on week to 645,861 mt.

Significantly, Iraq has accounted for all the imports from the Middle East to date this month; in March, Saudi Arabia and the UAE accounted for the bulk of supply from the region. Most of Iraq's fuel oil exports are straight-run fuel oil, traders said.

There were no imports from Canada over April 16-22, after 146,863 mt the week before, a 13-year high, the data showed. The fuel oil from Canada is LSFO with a sulfur content of around 0.8% produced at a refinery on the country's east coast, a trader said.

For fuel oil exports, Hong Kong was the largest recipient at 143,820 mt, compared with none the week before, the data showed.