Singapore oil inventories fall to a six-week low, with distillates leading the decline as geopolitical tensions continue to escalate

(1) Data released on Thursday shows that as of the week ending July 22, Singapore's onshore oil products total inventory dropped to 39.64 million barrels, a week-on-week decline of 1.5%, reaching the lowest level in six weeks, though still higher than last month's weekly average of 37.5 million barrels. (2) The decline in inventory was mainly driven by drawdowns in light and middle distillates, while heavy fuel oil inventory rebounded. Meanwhile, Red Sea vessel attacks and ongoing tensions between the US and Iran have heightened global supply uncertainties once again. (3) Light distillate inventory decreased for the fourth consecutive week to 11.47 million barrels, with gasoline net exports exceeding imports, primarily flowing to Indonesia, Australia, and Malaysia. Naphtha imports dropped by about 34% week-on-week, while exports grew by approximately 58%. (4) Middle distillate inventory fell to a three-week low of about 8.7 million barrels, showing divergent net export trends for diesel and jet fuel, with the latter doubling compared to the previous week, while diesel net exports declined nearly 28%. Diesel cargoes from Korea are expected to arrive in Singapore over the next two weeks. (5) Fuel oil inventory rebounded to a three-week high, rising 1.8% week-on-week to 19.46 million barrels, with imports surging by 65.4%. Nigeria and Brazil were the main sources of supply.