Singapore's middle distillates stocks hit highest in 2-1/2 years as exports dip
(Reuters) - Singapore's middle distillates stockpiles surged by 8% week on week to hit a fresh high since September 2021 as net exports of both diesel/gasoil and jet fuel/kerosene slipped by 98% and 26%, respectively, official data showed on Thursday.
Inventories of gasoil/diesel and jet fuel/kerosene at key oil storage hub Singapore were at 10.787 million barrels, compared with 9.99 million barrels a week ago, the data from Enterprise Singapore showed.
The large dip in net exports of diesel/gasoil was attributed to a more than 38% gain in total imports week-on-week, with import arrivals from South Korea and China being the key driver.
This was mostly in line with earlier trader expectations that these cargoes would land in Singapore in the near term, given the volatile east-west arbitrage window and better seller profitability regionally in Asia.
Imports from South Korea were so far at their highest level in 2024, the data showed.
March-loading cargoes were slated to gain for a third straight month, Kpler and LSEG ship tracking data showed.
This indicates that near-term price pressures in Asia will remain, some analysts say.
With the South Korean arbitrage now "more favorable than those from the Middle East into Singapore, aided by their reduced FOB (free on board) premia, March Singapore diesel spreads have weakened considerably, and are not far from a contango structure," Sparta Commodities analyst James Noel-Beswick said.
A contango price structure, where prompt prices are trading lower than forward month prices, typically encourages traders to hold on to their stockpiles as there is increased profitability selling forward cargoes instead.
Meanwhile, diesel/gasoil cargoes from the Middle East, mainly the United Arab Emirates, and India were also prevalent in overall imports for the week.
Total exports of diesel/gasoil fell by around 4% as volumes to regional destinations all slowed, especially to Indonesia and Australia.
Exports to Vietnam resurfaced given the prompt demand there recently.
On the jet fuel/kerosene front, exports from China were also evident, contributing to the drop in overall net exports.
There are still some signs of China-origin cargoes continuing well into April, given that some China majors have already kicked off spot sales this week, one refinery source said.
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