FUJAIRAH DATA: Oil product stocks rebound from 2-month low as ship fuel demand slows

Stockpiles of oil products at the UAE's Port of Fujairah climbed for the first time in six weeks, snapping the longest losing streak since 2020, as ship fuel demand slowed, leading to gains in heavy distillates used as a ship fuel and for power generation, according to data from the Fujairah Oil Industry Zone and ship tracking.

Total inventories gained 4.4% to 20.363 million barrels in the week ended May 27 after dropping to a two-month low a week earlier, FOIZ data published May 29 showed. Stockpiles have increased 17% since the end of 2023.

Stockpiles of heavy distillates used for power generation and ship fuel increased 9.5% to 10.116 million barrels over the latest week, a five-week high. Inventories of middle distillates such as diesel and jet fuel dropped 12% to 3.267 million barrels, a two-week low, while light distillates rose 6.4% to 6.980 million barrels, the most in three weeks.

Fuel oil imports were little changed at 2.47 million barrels in the week started May 20, with 712,000 barrels from Iran, 661,000 barrels from Russia, 889,000 barrels from Iraq and 212,000 barrels from Pakistan, according to Kpler.

Slowing ship demand for low sulfur fuel oil and more supplies of high sulfur fuel oil combined to push heavy distillates stockpiles higher, traders said.

Prompt LSFO barging slots for even next-day deliveries were seen in the latest week, compared with a normal of up to six days ahead, bunker suppliers said.

"There's a lot of pressure on many suppliers to sell as cheap as possible, especially with this sort of tepid demand so far in May at Fujairah," a bunker supplier said.

The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo averaged $9.62/mt over May 16-28, down from $11.35/mt in the first half of May, S&P Global Commodity Insights data showed.

Two Aframax-sized HSFO shipments from Russia and Iran found homes in Fujairah, adding to inventories, industry sources said.

"HSFO supply situation is now better than in H1 May, it isn't as tight, but just slightly so for [deliveries over] the next five to six days out," a Fujairah-based trader said.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo has averaged $35.98/mt since May 16, down from $41.25/mt in the first half of May, Commodity Insights data showed.

So far since the end of 2023, stocks of light distillates have surged 49%, heavy distillates have been little changed and middle distillates have risen 30%.