FUJAIRAH DATA: Middle distillates lead fall in oil product stockpiles

Stockpiles of oil products at the UAE's Port of Fujairah slipped back from a two-week high as of June 26, with a 24% fall in middle distillates inventories leading overall losses from a week earlier, according to data from the Fujairah Oil Industry Zone.

Total inventories at the key bunkering and trading hub fell 5.3% on the week to 21.68 million barrels as of June 26 towards a two-month low seen on June 12, FOIZ data provided exclusively to S&P Global Commodity Insights showed. Total inventories are now little changed since the start of the year.

Middle distillates, such as diesel and jet fuel, fell 24% to 3.49 million barrels, a seven-week low, according to data compiled by S&P Global since 2017. Heavy distillates used as fuel oil for power generation and shipping rose 2.8% over the week to 10.08 million barrels, a three-week high. Light distillates, such as gasoline and naphtha, slipped 4.5% to 7.1 million barrels.

Oil product exports except for fuel oil from Fujairah averaged an estimated 669,400 b/d in the week that started June 19, a sharp jump from 302,000 b/d a week earlier, according to S&P Global Commodities at Sea data. Fuel oil shipments averaged 118,900 b/d in the week that began June 19, up from 90,100 b/d in the week earlier, the data showed.

Regional market

Plentiful stockpiles of low sulfur fuel oil at Fujairah led suppliers to offer cargoes competitively in an effort to draw down inventories, according to local traders June 28. Intense competition among sellers plying around the port of Fujairah, and also at Khor Fakkan, depressed LSFO bunker premiums even for supplies available for prompt bunker deliveries, traders also said.

LSFO demand was also largely moderate at best, with the market "not so busy" at the port of Fujairah in the week ended June 23, according to local bunker suppliers.

The Platts Fujairah-delivered marine fuel 0.5%S bunker premiums over the benchmark FOB Singapore Marine Fuel 0.5%S cargo values slipped to average $4.14/mt over June 1-27, from $7.78/mt in May, according to S&P Global data.

With overall demand for high sulfur fuel oil bunker so far in June estimated below the brisker stream of inquiries seen earlier in May, the ample inventories pressured downstream premiums too, local traders said.

"Premiums [for delivered HSFO] came down to lower levels recently, because some deals were done at very competitive prices," a Fujairah-based bunker supplier said.

Despite some sizable HSFO requirements reportedly seen in the market, barge availabilities remain mostly healthy with adequate slots for prompt refueling dates, according to local suppliers.

"Lately, HSFO demand appears to have been somewhat slower... notwithstanding the few bigger clips seen in recent days, which also helped push up volumes," a Fujairah-based trader said.

Most recently, the Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessments fell to a near seven-month low of $14.78/mt June 23, before inching up to $16.89/mt June 27, according to S&P Global data. This bunker premium was last assessed lower at $11.08/mt on Nov. 28, 2022.