The large arrivals, on the back of lower exports in June, were due to rising demand because of purchases by unexpected buyers and tighter supplies than the Middle East, they added.
"Almost all of the June- and July-lifting cargoes are coming East rather than staying in the Middle East," a Singapore-based Western trader said. "That's a clear signal of the extent of disconnect between the two regions."
The July-arrival volumes were boosted by the recent sale of three lots, for loading in the early part and the middle of next month, by Saudi Aramco and its joint-venture partner, ExxonMobil.
Two of the 90,000-tonne cargoes, both of high 700-cst viscosity, for loading July 4-6 and July 13-15, were purchased by BP at discounts of $26.00-$27.00 and $27.00-$28.00 a tonne to Singapore spot 380-cst quotes, respective, on a free on board (FOB) basis.
The remaining 80,000 tonnes of Aramco's 380-cst grade, for mid-July lifting from the Sasref refinery in Jubail, was sold to Chevron at a discount of $6.00-$7.00 a tonne to spot quotes, FOB, up from minus $9.00-$10.00 for a mid-June loading lot.
Including the three parcels, the total July-arrival volumes from Saudi Arabia to East Asia stood at about 485,000 tonnes, up from 250,000 tonnes for June and the highest since April 2008, Reuters data show.
Despite the heavy Saudi arrivals, the market's supply-demand balance remains firm due to thin July-arrival supplies from the West, notionally estimated at just below 3 million tonnes, and at low levels for a second consecutive month.
The market is also further boosted by strong demand from unexpected sources -- Bangladesh is seeking up to 700,000 tonnes for second-half 2011 delivery, or more than 100,000 tonnes a month, while Malaysia has bought about 200,000 tonnes for April-August delivery.
This demand has come amid healthy requirements from the Singapore marine fuels market, the world's largest, with 3.4-3.5 million tonnes of sales per month, spurred by rapidly-falling crude benchmarks over the past two weeks.
"The tightness is also exaggerated by players who are reluctant to sell in the ex-wharf bunkers market because current flat-price levels are well below the cost of the oil they have in-tank," another trader said.
Reflecting this, the monthly average of its front timespread has held above a backwardation of $5.00 a tonne, up till Wednesday, up from $3.50 last month and was valued at $5.25.
Copyright Reuters, 2011