FUJAIRAH DATA: Oil product stocks rise to 6-month high led by gains in light distillates

Oil product stockpiles at the UAE's Port of Fujairah climbed to a six-month high June 6, led by a 17.4% surge in gasoline and other light distillates stocks from the week before, Fujairah Oil Industry Zone data published June 8 showed.

Total inventory was up 2.6% from a week earlier at 20.193 million barrels June 6 and was the highest since Nov. 15, 2021, the port data provided exclusively to S&P Global Commodity Insights showed. Inventories were 14.78% lower than at the same time last year.

Stocks of heavy distillates and residues used as fuels for power generation and marine bunkers stood at 10.368 million barrels, down 4.3% from a week earlier and the lowest in three weeks. Heavy distillate stocks were also 29.22% lower than a year earlier.

The delivered low sulfur bunker fuel price in Fujairah reached a record high of $1,070/mt on June 6 and June 7, when the price in Singapore was even higher at $1,115/mt, according to Platts assessments by S&P Global. A Fujairah trader said high Fujairah prices have curbed demand for term deals for June and July.

Singapore marine fuel 0.5% has traded at or near record premiums to Fujairah since May 27 and some Fujairah traders expect that Fujairah supply may be moved to Singapore to take advantage of the higher premium, indicating that Fujairah heavy distillate inventories may continue to fall. Fujairah refineries tend to have maintenance in June, which could reduce inventories even more, a Fujairah source said.

In addition to use in shipping fuel, heavy distillates are in demand at this time of year as Saudi Arabia looks to burn fuel oil for power generation as air conditioning use spikes in summer.

Fuel oils dominated product exports from Fujairah in May, with total product exports averaging 455,000 b/d in the month, down from 463,000 b/d in April and the lowest since January, according to Kpler data.

Saudi Arabia was the largest known destination for the exports from Fujairah, including gasoline and fuel oils, the data showed. The US was among the destinations for a second consecutive month, while no exports headed to China for the first month since December 2021.

Light distillate inventories stood at 7.414 million barrels June 6, up 17.4% from a week earlier and the highest since March 29, 2021. Inventories of light distillates are up 41.89% year on year.

Middle distillate inventories fell 4.6% over the week ended June 6 to 2.411 million barrels, the first drop in three weeks, the port data showed. The stockpiles, which include jet fuel and gasoil, were down 36.87% year on year.