(Reuters) - "China imported record-high volumes of fuel oil from Venezuela last month and will buy even more for June, as price-sensitive buyers seek cheaper and more direct supplies amid soaring East Asian prices.

Volumes for May were around 612,000 tons, official data showed. Imports from Venezuela for June were expected at 900,000-1 million tons, versus last year's monthly average of about 260,000 tons, shipping fixtures showed.

'We have no choice. The fuel oil from Singapore is simply too expensive for us, especially with outright prices so high and getting higher,' a Huangpu-based trader said. 'We have looked elsewhere for cheaper sources.'

The Venezuelan fuel oil, typically of 380-centistoke (cst) grade and with high metals content, is used in China's nascent marine fuels market, as well as blended with off-specification diesel to make utility-grade cargoes.

Under an agreement between the Chinese and Venezuelan governments, Asia's largest fuel oil buyer is able to obtain the product at lower prices since it started importing cargoes from the Latin American country in 2005.

Most of the June imports are delivered to the Zhousan port in the Yangtze Delta, where they are sold into the marine fuels market. The rest are scattered into the southern fuel oil port of Huangpu and into the northeastern port of Dalian, shipping fixtures showed.

The heavy inflows have depressed demand from Singapore and flooded the Zhousan market, where wholesale ex-wharf bunkers were heard done at $3-$4 a ton below Singapore spot quotes.

The glut has driven up inventories in China to about 2.5 million tons, well above average levels of 1.5 million tons, and depressed demand, traders said.

Some of the Venezuelan cargoes, imported by Chinese major PetroChina, could even find their way into the Singapore market, they added.

'There's just too much flows here and the tanks are too full. There is talk that PetroChina might even divert one of their June VLCCs to Singapore,' another Huangpu trader said (...)".