FUJAIRAH DATA: Oil product stockpiles climb for first time in three weeks

Stockpiles of oil products at the UAE's Port of Fujairah climbed for the first time in three weeks as of July 10 after a 23% jump in gasoline and other light distillates, according to July 12 data from the Fujairah Oil Industry Zone.

Total inventories rose 0.2% on the week to 20.235 million barrels as of July 10, after hitting a three-week low a week earlier on July 3, the FOIZ data provided exclusively to S&P Global Commodity Insights showed. Total inventories are little changed since the end of 2022.

Light distillates jumped to 7.664 million barrels, with the 23% gain the biggest for any week since early May 2022. The increase left light distillates at a five-week high.

Heavy distillates used as fuel oil for power generation and shipping dropped 10% over the week to 9.354 million barrels, the lowest since Feb. 13. Middle distillates such as diesel and jet fuel also declined 10% to 3.217 million barrels, a two-month low, according to the data compiled by S&P Global since 2017.

Oil products exports except for fuel oil from Fujairah averaged an estimated 508,000 b/d for June, down from 554,000 b/d in May, according to S&P Global Commodities at Sea data. Singapore was the top destination at 113,000 b/d and China was next at 51,000 b/d, the data showed. So far in July, the total for China is about 76,000 b/d, already the most for any month total since December 2020. Fuel oil shipments averaged 189,000 b/d in June, up from 151,000 b/d in May, with July so far at 334,000 b/d, the bulk of it destined for Singapore.

Middle distillates stockpiles are now up 4.1% so far in 2023. Light distillates have climbed 2.6%, while heavy distillates have fallen 7.5% over the same period.

Downstream bunker competition heats up

Competition in the downstream bunker market has drawn down inventories of both low and high sulfur fuel oil around Fujairah, as suppliers vie for inquiries with attractive offers, according to local traders.

Market participants polled by S&P Global largely attributed the stocks draw to intense competition in the downstream market as some suppliers were eager to move their LSFO and HSFO cargoes at competitive prices, rather than any substantial improvement in bunker demand.

However, stockpiles of both key bunker fuel grades were seen remaining ample for end-user requirements in the near term, traders said.

The flow of LSFO inquiries has been lackluster, and momentary upticks in demand in recent weeks were mostly "captured" by competitive sellers, depressing delivered premiums as a result, according to local bunker suppliers.

Platts assessed the Fujairah-delivered marine fuel 0.5%S bunker premiums over the benchmark FOB Singapore Marine Fuel 0.5%S cargo values to average $2.74/mt July 3-11, below the $3.79/mt across June, data by S&P Global showed.

Meanwhile, some Fujairah-based HSFO sellers were grappling with thin demand as other suppliers were offering more aggressively, suppliers said.

"There's quite a gap between initial offers and [eventual] fixing levels, especially with the slower demand for HSFO and marine gasoil," a Fujairah-based trader said July 12.

The Platts Fujairah-delivered 380 CST HSFO bunker premium over the IFO 380 CST 3.5% FOB Arab Gulf cargo assessments slipped $3.67/mt on the day to a near eight-month low of $7.02/mt July 11, according to data from S&P Global. The HSFO bunker premium was last assessed lower at $6.76/mt on Nov. 25, 2022.

The Fujairah-delivered 380 CST HSFO bunker premium has averaged $12.24/mt July 3-11, compared with $23.35/mt for all of June, S&P Global data also showed.

Two shipments totaling 620,691 barrels, or 97,747 mt, of HSFO were lifted from around Fujairah port during July 4-6 and were scheduled to arrive around Singapore Straits July 20, according to shipping data from Kpler.