“Everyone is undercutting everyone else because we all have more oil to sell than there is demand.
“The only smart thing to do is to cut costs and that’s by giving up some tanks.”
Singapore’s onshore storage capacity for residual product has more than doubled in the last three years.
Figures compiled by International Enterprise (IE), the Singapore government’s trade monitor, put onshore stocks of residual product at 23.395 million barrels last week.
That compares with stocks of just over 12 million barrels recorded by IE at the end of March in 2007.
The Singapore energy hub is currently facing an oversupply of fuel oil with supplies, especially from the West, outpacing demand from the bunker market and other industry sectors.
Western fuel oil arbitrage arrivals into East Asia in March are at a five-month high of 3.3 million to 3.4 million metric tonnes (mt), up from 3.0 million mt a month in January and February.
Companies reported to be trimming their fuel oil storage capacity in Singapore include Marubeni, Westport and SK Energy.