SINGAPORE: Front-month July-August time spreads and cash discounts of 380-cst fuel edged lower on Thursday despite a drop in Singapore onshore fuel oil inventories to a 10-week low.
"It's a bit odd that the market weakened today, but maybe traders are taking a breather after yesterday's rally," one Singapore-based trader said.
The time spreads widened their contango structure on Thursday to $1.25 a tonne below Singapore quotes, down 25 cents from the previous settlement.
In the cash markets, discounts of 380-cst fuel oil were 46 cents wider from the previous close at $1.57 a tonne below Singapore quotes.
Onshore Singapore fuel oil inventories fell by 2.656 million barrels (about 396,000 tonnes) to a 10-week low in the week to June 29, latest data from International Enterprise showed.
At a total of 25.56 million barrels in the week to June 29, the latest onshore fuel oil inventories were 9.4 percent lower than last week and 18 percent down on the 31.184 million barrels in the week to June 1.
Net imports of the fuel into Singapore over the past week were 77 percent higher from the previous week, totalling 1.136 million tonnes in the week to June 29.
Venezuela and the Netherlands were by far the largest net importers into Singapore, sending 563,000 tonnes and 550,000 tonnes, respectively, followed by 117,000 tonnes from Malaysia and 120,000 tonnes from Indonesia.
Iranian fuel oil imports were uninterrupted for a sixth week, lifting its total fuel oil imports into Singapore to 1.18 million tonnes since the start of the year.
South Korea, China and Japan were the top export destinations of Singapore fuel oil, absorbing 158,000 tonnes, 91,000 tonnes and 80,000 tonnes respectively.
Given net imports and stock draws for the week, implied bunker sales for the week to June 29 stand at 740,000 tonnes, against a 1.014 million tonne weekly average since the start of the year. The above calculation, however, does not account for changes in floating storage inventories.
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