Singapore refined oil stocks drop to a three-week low, fuel oil inventories rebound

⑴ Singapore government data shows that as of the week ending October 21, Singapore's onshore refined oil inventories totaled approximately 38.13 million barrels, falling to a three-week low, mainly driven by declines in middle and light distillate inventories. ⑵ Light distillate inventories dropped to a three-week low of about 10.97 million barrels. Naphtha imports decreased by about 29% week-on-week, as there were no cargo arrivals from the Middle East and India, with Russia as the largest supplier; gasoline imports fell about 61% week-on-week, while exports rose about 49% week-on-week. ⑶ Middle distillate inventories retreated after approaching a nearly six-month high the previous week; diesel and jet fuel inventories fell about 20% week-on-week to around 8.31 million barrels, the lowest in four weeks. Traders noted that diesel exports from Northeast Asia, especially South Korea, are expected to remain strong before November. ⑷ After six consecutive weeks of decline, residual fuel oil inventories rebounded for the first time, increasing by about 4.5% week-on-week to around 18.86 million barrels, though still below the average weekly level of last month. Fuel oil imports rose by about 75% week-on-week, and exports more than tripled. ⑸ Institutional shipping data shows that East Asia's supply in October was relatively ample, with an increase in shipments from major export regions. However, trade sources said high freight rates may restrain arbitrage flows in the coming months. ⑹ Overall, there was a significant drawdown in light and middle distillate inventories, while fuel oil supply remained relatively ample. Attention should be paid to the pace of Northeast Asian diesel exports and the impact of freight rates on regional arbitrage.