Singapore fuel oil stocks surge to five-week high, cracks hit two-week low

London, (Quantum Commodity Intelligence) – Singapore fuel oil stocks surged 5% to a five-week high last week, according to government data, on fresh imports and sluggish demand.

Residual fuel oil stocks rose 1.3 million barrels in the week ending June 10 to 26.918 million barrels – the highest since 5 May and a second successive week of builds that has seen inventories climb by 4 million barrels this month.

The figure is 15% higher than the average stock levels so far this year and comes as refining margins for fuel oil have been on the slide due to abundant supply.

Fuel oil cracks for 3.5% sulfur 380cst hit a two-week low of -$10.35/b FOB Singapore versus cash August Brent and -$8.84/b versus August Dubai barrels, according to Quantum data.

At the same time, lower sulfur 0.5% marine fuel hit an eight-session low of $2.26/b using a 6.9 density factor.

Yet while fuel oil stocks rose, light ends and middle distillates fell.

Light end stocks, including gasoline and naphtha, fell 1 million barrels over the course of the week to 12.1 million barrels, the lowest since 5 May, leaving inventories around 19% lower than the average so far this year.

And middle distillate stocks, including diesel and jet, fell just 198,000 barrels to 11.267 million barrels.

Inventories now stand at 19% below this year's average, as demand for road and air fuel picks up.