SINGAPORE: Asia's 180-cst high-sulphur fuel oil (HSFO) cash premium extended declines, sinking to a near four-month low as weak high-sulphur feedstock consumption from utilities failed to provide support beyond the typical summer demand season.
180-cst HSFO cash premiums slipped to 25 cents a tonne to Singapore quotes, the lowest since June 30, amid absent deal activity in the Singapore window and a weakening prompt market structure. In the low-sulphur market, the front-month 0.5% very low-sulphur fuel oil (VLSFO) crack also extended losses, falling to a near three-week low of $12.55 a barrel above Dubai crude, despite weaker crude oil prices.
This came as Singapore residual fuel oil inventories rose 0.5% in the week ended Oct. 27, marking four consecutive weeks of stock build-up, as weekly net import volumes dropped but were near the 2021 weekly average.
Onshore fuel oil stocks rose by 109,000 barrels, or about 17,000 tonnes, to a seven-week high of 21.8 million barrels, or 3.43 million tonnes, Enterprise Singapore data showed.
But, the residual fuel stocks were still 6% lower from year-ago levels and below the 2021 weekly average of 22.76 million barrels.
Singapore's weekly net import volumes fell to 609,000 tonnes in the week ended Wednesday, down 47% from the five-week high of 1.15 million tonnes in the previous week. Weekly figures, however, are volatile.
By comparison, Singapore fuel oil net imports have averaged 681,000 tonnes a week so far in 2021.
Terminal congestion at one of Singapore's storage facilities due to a recent COVID-19 outbreak there, causing bunker barge loadings are delays, may have also contributed to the higher stocks, trade sources said.
Assessments showed fuel oil flows into East Asia, most of which come to Singapore, were between 5.5 million tonnes and 6 million tonnes in October, compared with 5.1 million tonnes in September, according to Refinitiv Oil Research.
"Increased volumes this month are attributed to higher volumes are entering the major refining centres as fuel oil feedstocks," Refinitiv Oil Research said.
"Arrivals to China, India and South Korea are assessed at 1.74 million tonnes, 0.76 million tonnes and 0.7 million tonnes, respectively, this month - the highest in three months for all three."
No VLSFO or HSFO cargo trades were reported in the Singapore trading window.
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