FUJAIRAH DATA: Oil products stocks drop to one-month low

Oil products inventories at the UAE's Port of Fujairah fell 7.6% in the week ended March 3, led by a 26% slump in gasoline, naphtha and other light distillates, according to Fujairah Oil Industry Zone data published March 5.

The total fell to 18.877 million barrels, the lowest in a month, according to FOIZ data. Light distillates declined to 6.302 million barrels, the lowest in two months.

Middle distillates, such as jet fuel and diesel, dropped 14% to 2.180 million barrels, the lowest in three weeks. Heavy distillates, used as fuel for power generation and shipping, climbed 11% to 10.395 million barrels, holding at or near an eight-month high in the past month.

Refined product exports from Fujairah averaged 653,000 b/d in February, up from 440,000 b/d in January and the most since August, according to Kpler data. Some 74,100 b/d of gasoline headed for Pakistan last month, double the pace in January, while a record 75,600 b/d of fuel oils was destined for South Korea, the first such shipment since April 2022.

Bumpy demand in the low sulfur fuel oil segment through end-February kept overall stockpiles buoyed, capping potential for significant upsides to delivered premiums, traders said March 5.

Competition from at least one seller operating in the neighboring Khor Fakkan has reportedly captured some bunker demand from Fujairah over the past couple of months, exacerbating the lackluster premiums in the LSFO space.

To the detriment of ex-wharf buyers in Fujairah, cargo suppliers have been rather reluctant to lower offers for March-loading barrels, despite ample stockpiles and slower-than-expected downstream sales volumes.

Platts, part of S&P Global Commodity Insights, assessed the Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo averaged $11.58/mt so far in March, up from $7.12/mt for all of February.

In the high sulfur fuel oil segment, some resumption of cargo inflows also kept Fujairah's inventories adequate for the near term, whereas bunker demand is expected to maintain a healthy trajectory throughout early March.

Akin to LSFO, however, competition from the nearby Sharjah's port of Khor Fakkan in the HSFO turf also pressured delivered valuations, with most suppliers at Fujairah having filled and managed to commit their very prompt barging schedules in recent trading days.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium to fuel oil 380 CST 3.5%S FOB Arab Gulf cargoes inched down to average $20.26/mt March 3-4, below the $21.09/mt for all of February.