Commercial onshore light distillate stocks in Singapore, the region's largest oil trading hub, rose for the second consecutive week as heavy inflows of blendstocks into the city-state lifted total inventories above the 11-million-barrel mark.
Stocks of light distillates increased 6.3% week on week to a near 2-month high of 11.272 million barrels in the week ended Wednesday, data released late Thursday by Enterprise Singapore showed.
Stocks were last higher in the week ended July 10, at 11.309 million barrels.
Enterprise Singapore's definition of light distillates includes gasoline and blendstocks such as naphtha and reformate, but not gases like LPG.
DEMAND FOR PROMPT GASOLINE CARGOES FIRM
The uptick in total inventories was mainly due to firm demand for gasoline blendstocks in Singapore, due to robust gasoline demand in the region.
Imports of naphtha, reformate and other blendstocks over August 22-28 edged up 3.4% on the week to 205,514 mt -- a 12-week high. It was last higher over the June 6-12 period, at 219,132 mt.
Demand for blendstocks typically increase in tandem with stronger prompt demand or expectations of gasoline supply shortage, as blendstocks are needed to meet the specifications of different grades of finished gasoline across the region, sources said.
India's Hindustan Petroleum Corporation Limited and Indonesia's Pertamina were once again seeking gasoline, with the former looking to buy a total of 60,000 mt of 91.6 RON gasoline for September 18-20 and October 5-8 delivery, while the latter had requirements for a total of 690,000 barrels per month of 88 RON gasoline for loading over the fourth quarter.
Further demonstrating the bullish sentiment, the backwardation in the Singapore 92 RON gasoline derivatives market surged to a near 2-year high at the Asian close Thursday. The front-month September/October timespread was assessed at $1.65/b. The front-month spread was last assessed higher on September 4, 2017 at $1.70/b, S&P Global Platts data showed.
RARE ALGERIAN NAPHTHA CARGO
Among the imports of blendstocks, 87,641 mt of naphtha from Algeria made a rare move into Singapore during the week, Enterprise Singapore data showed. The cargo from Skikda would likely be either light virgin naphtha or heavy full-range naphtha, with the latter grade commonly favored by condensate or naphtha splitter operators, sources said.
Apart from Algeria, there were also 35,307 mt of imports of naphtha, reformate and other blendstocks from Thailand, 29,973 mt from Qatar, and 21,659 mt from the UAE, among others.
