This is a (really old) known issue, as stated on mod main page. Wube devs have not fixed it.
Inserters (and loaders) do not interact correctly with spent fuel slots in certain kinds of entities (such as furnaces.)
If you do not mind losing the steel, you may edit my mod file config/config-1.lua
. Find the corresponding fuel entry, then remove burnt_result = "empty-barrel"
from its item line.
For example, heavy oil would have line 22 changed from:
item = { name = "heavy-oil-barrel", barrel_volume = 50, burnt_result = "empty-barrel"},
to
item = { name = "heavy-oil-barrel", barrel_volume = 50},
However, I would NOT include this in official releases, as I still consider the barrel costs more than the fuel. :-D
You will need to edit your own copy.