Singapore’s middle distillates inventories plunged below 10 million barrels for the first time in more than two months despite the city-state turning a net importer of jet fuel/kerosene for the week, official data showed on Thursday.

Stockpiles of diesel/gasoil and jet fuel/kerosene at key oil storage hub Singapore were at 9.807 million barrels for the week ended Sept. 25, down from 10.239 million barrels in the previous week, data from Enterprise Singapore showed.

Total imports of jet fuel/kerosene rose above 70,000 metric tons, with China volumes being the key contributor. Singapore is expected to import multi-year-high volumes of jet fuel this month.

Strong export margins compared with other fuels such as gasoline and diesel are encouraging China oil majors to sell out their stocks of aviation fuel, some analysts said.

“Further out, we expect this trend of high jet/kero exports to Singapore, or Asia, to continue for the foreseeable future. Chinese refiners have precious few alternative outlets for their jet,” said Zameer Yusof, principal middle distillates analyst at analytics firm Kpler.

Also, India-origin jet fuel/kerosene is likely to arrive at Singapore shores in the next two weeks, Kpler and LSEG shiptracking data showed.

Jet fuel/kerosene exports, however, gained about 37% week-on-week, with volumes mostly heading to regional destinations such as Australia and New Zealand, the data showed.

On the diesel/gasoil front, net exports dipped by around 12% week-on-week, with total imports falling by a quicker pace than total exports.

Imports continued to come from India and Malaysia, in line with some earlier analyst expectations.

More India-origin barrels are still likely to arrive in the coming weeks on vessel Pelagic Tarpon, LSEG shiptracking data showed.

Both Middle East- and India-origin diesel barrels “remain orientated East rather than towards North-West Europe,” said Sparta Commodities analyst James Noel-Beswick.

Total gasoil/diesel exports fell by around 24% week-on-week, with exports to Australia missing for the week. Volumes were mostly headed for Indonesia, Malaysia, Myanmar and Vietnam.
Source: Reuters (Reporting by Trixie Yap; Editing by Subhranshu Sahu)