Asia/Pacific News
Singapore's Highest Oil Product Inventories Since 1999 a Sign "Markets are Struggling with Supply Glut"
Singapore oil product inventories have swelled to their highest volumes since at least 1999, and analysts say rate cuts could be on the horizon as markets struggle with the supply glut, Reuters reports.
Oil product stocks last week reportedly climbed for the second straight week in a row, an occurrence that hasn't been seen since August 2014.
"Diesel stocks are rising fast, especially in the East of Suez," said analysts from Energy Aspects.
"Run cuts to the tune of 0.7 million barrels-per-day globally will be needed to balance Q4 2015's diesel (supply) worldwide, especially given the rate at which onland stocks are rising."
IE Singapore data shows that middle distillates stocks in the country grew nearly 6 percent to 13.172 million barrels during the week ending July 22, an almost four-year high.
As Asian gasoil margins are said to sit at a five-year low and weak regional demand intensifies mounting supplies, traders have reported that they are storing the product in landed tanks.
Gasoil shipments to Australia and Togo reportedly fell last week alongside increased imports from China, Japan, South Korea, and Taiwan.
High freight rates are said to be making gasoline shipments to Europe less economically viable, but increased flow to the Netherlands is said to suggest such shipments may continue to grow.
IE Singapore data also showed that residue oil inventories reached a historical high of 28.02 million barrels in the week ending July 22, surpassing June's record setting volumes by 1.5 percent.
Traders are said to be loading back to tanks some of the record 5.994 million tonnes that was traded on Platts' pricing process in June, with more than 3 million tonnes of the due to load in July.
In June, it was reported that Singapore saw over $750 million worth of fuel oil traded during the month's first week, about 60 percent of Singapore's average monthly sales.
