FUJAIRAH DATA: Oil product stockpiles extend gains to 8-month high

Stockpiles of oil products at the UAE's Port of Fujairah climbed for a third consecutive week, extending gains to an eight-month high, driven by a 22% increase in heavy distillates used as ship fuel and for power generation, according to data from the Fujairah Oil Industry Zone.

Total inventories increased 7.2% to 22.033 million barrels over the week ended April 15, the highest since June 5 last year, the FOIZ data published April 17 showed. Stockpiles have increased 27% since the end of 2023.

Stocks of heavy distillates jumped to 10.661 million barrels as of April 15, the most since Dec. 18. Fuel oil imports into Fujairah jumped to 3.17 million barrels in the week started April 8, with Kuwait supplying a record 1.65 million barrels, all from Al-Zour port, according to Kpler data. Another fuel oil cargo tendered from Al-Zour is expected in Fujairah this week, traders said. Kuwait's Al-Zour refinery is the Middle East's biggest refinery with a capacity of 615,000 b/d and reached maximum capacity for the first time in December. Shipments of diesel fuel from Al-Zour to Fujairah started in March, according to the data.

Increased ship fuel supplies from Kuwait helped to put a cap on price gains in March, traders said. Total bunker sales in March climbed to a 19-month high, according to FOIZ data.

Inventories of middle distillates including diesel and jet fuel dropped 4.4% over the week to 3.842 million barrels, a two-week low. Stockpiles of light distillates such as gasoline and naphtha fell 3.6% to 7.530 million barrels, matching the level four weeks earlier.

So far since the end of 2023, stocks of light distillates have climbed 61%, heavy distillates have increased 5.1% and middle distillates have risen 53%.

Rough weather disrupts refueling

Two cargoes totaling approximately 1.65 million barrels, or equivalent to around 260,000 mt, of low sulfur fuel oil originating from Kuwait's Al-Zour refinery found homes around Fujairah hub in the first half of April, with the second replenishment cargo reportedly landing around April 13, according to industry sources, leading to a stock build.

In addition, refueling operations and bargeing schedules have been disrupted due to poor weather conditions around Fujairah, contributing to build-up of heavy distillates stockpiles, bunker suppliers said.

Shipowners are expecting a backlog at terminals due to delayed barge loadings as a result of the heavy rains and strong winds.

Low sulfur fuel oil bunker deliveries have also been delayed due to inclement weather, while lead times have been extended to up to seven days recently, from three-four days typically.

Meanwhile, tight bargeing schedules for high sulfur fuel oil are expected to continue in the trading week of April 15, while intermittent operational stoppages are expected through April 17 amid choppy sea conditions.

However, the weather conditions are likely to ease within the next couple of days, as some are not expecting operational disruptions to last long, local traders said.

Platts, part of S&P Global Commodity Insights, assessed the Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the benchmark FOB Singapore marine fuel 0.5%S cargo at an average of $16.99/mt over April 15-16, up from $14.74/mt in the week ended April 12.

Platts assessed the Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo at an average of $29.68/mt over April 1-16, well above the $19.40/mt seen across March.