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imageSINGAPORE: Cash differentials for Singapore 380-cst fuel oil narrowed their discounts for a fourth consecutive session on Thursday, following a 4 percent decline in onshore inventories.

Discounts for 380-cst fuel narrowed 33 cents on Thursday to $1.85 a tonne below Singapore quotes.

Three 380-cst fuel oil cash deals were reported totalling 60,000 tonnes and another three deals of the same volume were reported for the 180-cst fuel, industry sources said.

As on Wednesday, Coastal was on both sides of trades: selling one 380-cst cargo at a $2.50 discount to Singapore quotes while buying another 380-cst cargo for $243 a tonne, sources said.

In the swaps markets, 380-cst June-August swap spreads on the Intercontinental Exchange (ICE) dried up with about 110,000 tonnes traded on Thursday, compared to 530,000 yesterday, said one Singapore-based trader. "Buying interest shifted to Sept-Oct swap spreads for some reason, trading a total of about 360,000 tonnes," said the trader.

Singapore onshore fuel oil inventories fell by 1.172 million barrels (mb) (or 175,000 tonnes) in the week to June 22 to a 6-week low, the latest data from International Enterprise showed.

Despite the stocks draw, the 28.216 mb (4.2 million tonnes) of onshore fuel oil storage in Singapore is still well above the 2016 average of 26.241 mb (3.9 million tonnes) and the 22.488 mb average (3.4 million tonnes) seen over the same period last year.

In the week to June 1, Singapore inventories reached a record high of 31.18 million barrels (or 4.65 million tonnes).

Net imports of the fuel in Singapore stood at almost 642,000 tonnes in the week to June 22. Iran was the largest net importer into Singapore while Bangladesh was the leading export destination with 148,000 and 83,000 tonnes, respectively.

Iranian fuel oil imports continued for a fifth uninterrupted week, lifting its total fuel oil imports into Singapore to 1.09 million tonnes since the start of the year.

Given net imports and stock draws for the week, implied bunker sales for the week to June 22 stand at 467,000 tonnes, well below the 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.

Copyright Reuters, 2016