Residual fuel oil stocks at key trading hub Singapore fell further to 11 week-lows as imports slumped, official data showed on Thursday.

Onshore fuel oil stocks fell 2.0% to 19.37 million barrels (3.05 million metric tons) in the week to Oct 4, down for a second week, Enterprise Singapore data showed.

Weekly net imports, calculated by subtracting total exports from total imports, fell 85.4% from last week to 122,000 tons.

Imports into storage have declined in recent weeks amid strong market backwardation, which disincentivises oil storage economics. Front-month prices are higher than those in the future months in a backwardated market.

The prompt month backwardation timespread for 0.5% very low sulphur fuel oil widened to a four-month high in early October, LSEG data showed. The balance-October/November timespread was pegged at $18 a ton in Asia morning on Thursday.

Most of the trade flows were regional, with supplies moving within Asia itself, the data from Enterprise Singapore showed.

Japan became the top origin for Singapore’s net fuel oil import volumes at 51,000 tons, while South Korea was the top destination for net fuel oil export volumes at 39,000 tons.

The overall decline in total fuel oil imports was driven by absent volumes from the Middle East and the West in the week to Oct. 4, as these are typically the top origins for Singapore’s imports.
Source: Reuters (Reporting by Jeslyn Lerh; Editing by William Maclean)