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USGC fuel oil stocks 4 million barrels more than Singapore, spread remains $5/b

https://www.chemnet.com   Aug 22,2014 Platts
US Gulf Coast residual fuel oil stocks are more than 4 million barrels higher than Singapore inventories -- the largest difference since March -- while the markets' HSFO spread has remained above the $5/barrel mark for more than two weeks.

The Gulf Coast and Singapore markets are closely related. About one-third of all US fuel oil exports went to Singapore in 2013, the most of any country. Products move between the two markets depending on arbitrage opportunities, typically by going around the Cape of Good Hope in South Africa.

Singapore heavy distillate stocks, which include cracked and straight run fuel oil and low sulfur waxy residue, rose 2.5% to 16.952 million barrels in the week to Wednesday, according to data published late Wednesday from International Enterprises Singapore, a government agency that is part of Ministry of Trade and Industry.

US Energy Information Administration data published Wednesday showed Gulf Coast fuel oil stocks rose 3% to 21.030 million barrels during the most-recent reporting week. That put stocks in the largest US market 4.078 million barrels higher than Singapore inventories, the largest difference since Gulf Coast stocks reached more than 5.2 million barrels above Singapore stocks in the week ended March 5, data show.

Singapore stocks have averaged about 534,000 barrels more than Gulf Coast stocks over the past five years; however, Gulf Coast stocks have averaged about 2.3 million barrels more than Singapore stocks in 2014.

Gulf Coast fuel oil stocks account for about 60% of total US stocks, and Gulf Coast exports account for 80% of total US fuel oil exports.

The 10-day moving average of Gulf Coast 3%s residual fuel oil's discount to Singapore HSFO stood at about $5/b Wednesday and has been above the $5/b mark for 16 trading days. Typically, Gulf Coast HSFO is about $5.50/b less than Singapore HSFO.

A recent cargo for 130,000 mt of fuel oil going from the USGC to Singapore was fixed at $2.95 million, or about $3.57/b, according to a fixture report.

There are seven tankers carrying a combined 13 million barrels of dirty petroleum products from the USGC bound for Singapore and due to arrive August 24-September 18, according to Platts cFlow vessel-tracking software. The tankers are Sirius Star, Desimi, Stena Superior, Sifnos, Dalian Venture, Aquila and Wafrah.
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