By Jeslyn Lerh and Cassandra Yap
SINGAPORE, May 24 (Reuters) - Onshore fuel oil stockpiles at key storage
hub Singapore plummeted to a 5-1/2 year low, latest data showed, as incoming
supplies to Asia fell with the Middle East exporting fewer cargoes due to peak
summer demand.
Singapore's fuel oil inventories fell 17.46% from last week to
15.78 million barrels (2.48 million metric tons) in the week ended May 22, the
lowest since late-October 2018, Enterprise Singapore data showed on Thursday.
"Singapore inventories plummeted to their lowest since November 2018 as
inflows from the Middle East dried up," said consultancy FGE.
"This was likely due to the seasonally increasing demand for fuel oil for
power generation in the Middle East as temperatures rise," added FGE.
Supplies to the wider Asia region trended lower for a second consecutive
month, dipping below 6 million tons for May, ship-tracking data from LSEG Oil
Research showed, led by supplies from the Middle East falling below 1.3 million
tons for the second consecutive month in May.
This has weighed on weekly inventory levels at Singapore, calculations based
on Enterprise data showed, despite countering a weekly uptick in net imports.
Fuel oil inventories averaged at 18.37 million barrels a week in May so far,
compared to 20.80 million barrels in April and 20.97 million barrels in March.
The lower supplies have supported high-sulfur fuel oil (HSFO) price
benchmarks, with 380-cst fuel margins touching nine-month highs
earlier this week.
"HSFO's strength is attributed to dwindling supplies... with little
incremental upside, resulting from Saudi Arabia's baseload crude output cuts of
heavy crudes to Asian refiners that have reduced the production of refinery
bottoms," said analysts at LSEG Oil Research.
On exports, fuel oil outflows emerged from Singapore onshore tanks to South
Asian countries including Bangladesh, India and Sri Lanka this week, versus zero
last week, based on Enterprise Singapore.
South Asia typically imports more fuel oil during summer months for power
generation so this could also lead to further drawdowns in inventories at
regional storage hubs, said industry sources.
Week to May 22, Fuel oil (in Total Total Net Imports
metric tons) Imports Exports
AZERBAIJAN 6,080 0 6,080
BANGLADESH 0 15,048 -15,048
BRAZIL 182,384 0 182,384
BULGARIA 4,839 0 4,839
CHINA 3,523 0 3,523
CONGO 74,327 0 74,327
ESTONIA 48,390 0 48,390
INDIA 77,427 350 77,077
INDONESIA 97,920 0 97,920
ITALY 14,164 0 14,164
KOREA, REP OF 1 0 1
KUWAIT 141,918 0 141,918
MALAYSIA 18,599 170,162 -151,563
NETHERLANDS 145,818 0 145,818
NEW CALEDONIA 0 5,599 -5,599
OMAN 79,243 0 79,243
ROMANIA 13,965 0 13,965
SRI LANKA 0 26,533 -26,533
SWEDEN 26,983 0 26,983
THAILAND 47,089 0 47,089
TURKMENISTAN 38,985 0 38,985
UNITED ARAB EMIRATES 57,877 0 57,877
VIETNAM 11,835 0 11,835
TOTAL 1,091,367 217,692 873,675
(Data from Enterprise Singapore)
(Reporting by Jeslyn Lerh and Cassandra Yap; Editing by Krishna Chandra Eluri
and Varun H K)