Singapore's weekly stockpiles hit a more-than one-year high in the week ended March 15, a sign that regional cargoes are being directed to the Asian blending hub for temporary storage.
"Anticipation is that (the stock) build-up will last three to six months. However, it will depend on global demand growth led by the economic situation in the Western countries," said David Jorbenaze, a senior analyst at analytics and consulting firm ICIS. Russian exports to African markets including Tunisia, Morocco and Egypt have steadily risen since December, with March loadings likely above 1.15 million tonnes, shiptracking data from Refinitiv and Vortexa showed, levels unseen in the past four years.
Russian diesel loading to the eastern Mediterranean region
will stay above 1.3 million tonnes, similar or higher than
February volumes, the data showed.
Sufficient supplies from the Middle East and India directed to South Asian markets such as Bangladesh and Sri Lanka amid the closed arbitrage market to northwest Europe and Kuwait's second phase start-up at the Al Zour refinery have further limited destinations for Asian exporters. North and Southeast Asian exports to northwest Europe slumped in January and February from record highs in the fourth quarter of 2022 to average 230,000-280,000 tonnes per month, Refinitiv and Vortexa data showed.
Most March and April cargoes from Asia are heading to storage tanks in Singapore or Malaysia for contractual delivery or to cover trading positions, one northeast Asian refiner said, citing lacklustre end-user demand.
Average monthly imports in the first quarter were at 1.47 million tonnes for both countries, up from 1.35 million tonnes per month in the fourth quarter of 2022. Gasoil stored onboard vessels in Singapore and Malaysia also hit a one-year high in early March at 480,000 tonnes, Vortexa data showed.
DEMAND HOPES Still, some market players are hopeful demand will improve in April to absorb some of the supply, while there is still room in Singapore to hold stocks, with current inventories far below 2020's peak of 16.6 million barrels.
Expectations for lower exports from China in March on
domestic stockpiling ahead of the refinery turnaround season
will also likely ease the regional supply glut in coming weeks,
traders said.
Also, the arbitrage window to Europe could reopen if demand
rebounds and if strikes in France are prolonged, which would
reduce supplies, a Singapore-based trader added.
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Russia's gasoil exports to Africa and east Mediterranean ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Trixie Yap; Editing by Sonali Paul)
