NEW DELHI: Singapore light distillate stocks rose this week to record highs, LSEG data showed on Thursday, as a deep contango structure in gasoline prices encouraged storage amid lower demand, traders and analysts said.
In a contango structure, prices for immediate supply trade below those for future delivery. Singapore’s onshore oil products inventory held by up to 14 major oil and oil storage companies rose by 1.496 million barrels to 19.474 million barrels in the week to February 18, according to data released by Enterprise Singapore.
“The contango (in gasoline market) is deep, everybody would like to roll,” a Singapore-based fuel trader said, referring to the practice of selling expiring prompt positions and buying later-dated contracts. The price gap between immediate and next-month gasoline contracts was the deepest since June 2020 in February.
Light distillate stocks have steadily risen in February in the Singapore Strait amid high supplies of naphtha and gasoline while demand for both products has remained lacklustre.
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