Higher implied US fuel oil demand in September countered expectations - API

US residual fuel oil supply which include fuel supplied for power generation, heating and the bunker market touched 400,000 b/d in September, according to American Petroleum Institute (API).

PHOTO: Oil refinery complex with big American flag displayed, and fumes coming out from the chimney. Getty Images

This was 2.9% higher than in August, and about 5.3% higher than in September last year.

The US Energy Information Administration (EIA) recorded an event bigger 16% increase in fuel oil supply from August, to 358,000 b/d in September.

The API argues that the rise in fuel oil supply in September countered market expectations because US freight demand had shown signs of dropping off - and as less freight should dent bunker demand from container ships to some extent.

Lower demand for consumer goods contributed to pull US freight demand down by 20% in September and October, CNBC has reported, citing executives at freight firms.

Coming into October fuel oil supply - or implied demand - has shown clear signs of slowing again. Around 17% less fuel oil was supplied in the first two weeks of October than across September.

By Nithin Chandran

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