- Inventories down for third straight week
- Market backwardation remains strong
- China becomes top destination for exports
Residual fuel oil stocks at key trading hub Singapore slipped to three month-lows in the week to Oct. 11, logging a third straight weekly decline, official data showed on Thursday.
Strong Market Backwardation
Onshore fuel oil stocks STARS-SIN fell 7.2% to 17.97 million barrels (2.83 million metric tons), data from Enterprise Singapore showed. O/SING1 The fall in inventories came despite a recovery in weekly net imports at 486,000 tons, climbing by nearly four times compared with last week. A strong market backwardation continued to spur selling interest as such a market discourages storage, with front-month prices higher than prices in the future months.
The prompt-month backwardation for 0.5% very low sulfur fuel oil remained wide after hitting a four-month high in early October, LSEG data showed, with the balance-October/November time spread pegged at $20 a ton on Thursday. LFO05FSGSMc0 Meanwhile, Malaysia was the top origin for Singapore’s net fuel oil import volumes at 263,000 tons, while China was the top destination for net fuel oil export volumes at 100,000 tons.
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Source: XM
