Onshore fuel oil stockpiles in major oil storage hub Singapore have risen to three-week highs, data showed on Thursday.

The stockpiles climbed 3.4% to 25.56 million barrels (about 4.03 million metric tons) in the week to December 3, data from Enterprise Singapore showed.

Inventories remain well above the average of 22.6 million barrels per week this year.

Despite a drop in weekly imports, fuel oil stocks continued to pile higher amid a contango market structure, which makes storage economics more economical. Both high-sulphur and low-sulphur fuel oil markets are in a contango for prompt trading months, based on data from trade sources.

Meanwhile, total fuel oil inflows into onshore storage fell 27.5% week-on-week to about 704,000 tons. Russia was the top origin for the imports.

As for outflows, volumes slumped 44.7% from the previous week to about 282,000 tons, with most exports heading to China as well as neighbouring storage hub Malaysia.

Spot differentials for high-sulphur fuel oil continued to hold in steep discounts, while low-sulphur fuel oil differentials were at near parity to cargo quotes.
Source: Reuters