FUJAIRAH DATA: Oil product stockpiles resume gains

Stockpiles of oil products at the UAE's Port of Fujairah climbed 1.7% in the week to Aug. 14, the third gain in four weeks as products exports slowed, according to ship-tracking data and figures from the Fujairah Oil Industry Zone.

Total inventories rose to 18.838 million barrels, the FOIZ data published Aug. 16 showed.

Inventories of middle distillates, including jet fuel and diesel, climbed for the first week in six, snapping a record losing streak since S&P Global Commodity Insights began compiling the data in 2017. They jumped 10% to 2.423 million barrels after falling 38% over the previous five weeks. Light distillates fell 0.2% to 7.629 million barrels, the first drop in four weeks. Heavy distillates used as fuel oil for power generation and shipping climbed 1.3% over the week to 8.786 million barrels.

Exports of oil products slowed significantly this month. Oil product exports excluding fuel oil from Fujairah averaged an estimated 437,000 b/d in the week started Aug. 7, down from 834,000 b/d a week earlier and the lowest in four weeks, according to S&P Global Commodities at Sea data.

Singapore was the top destination at 293,000 b/d, with the rest going to Saudi Arabia, Oman and Mauritius. Fuel oil exports averaged 138,000 b/d in the same week, down from 285,000 b/d a week earlier. Some 43,000 b/d of fuel oil was destined for Iraq, the first such shipment since late June.

Total inventories are down 8.9% since the end of 2022, led by a 22% drop in middle distillates. Heavy distillates stocks dropped 13% so far in 2023, while light distillates gained 2.2% over the same period.

Ample stocks pressure premiums

Amid buoyed residual stockpiles around Fujairah port, suppliers of both the high and low sulfur fuel oil grades were seen mostly offering out aggressively to whet end-users' appetite in the downstream market, according to traders Aug. 16.

Tough competition among suppliers based in Fujairah, also at the neighboring Khor Fakkan port, progressively pressured bunker premiums of both fuel oil grades, despite a recent marginal uptick in LSFO demand, traders said.

Healthy cargo availability of HSFO product enabled some suppliers to offer out for prompt refueling dates, whereas others that were able to secure more deals were forced to extend lead times toward the last two trading weeks in August, according to local traders.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5%S FOB Arab Gulf cargo fell to an average of $10.05/mt in July from $23.35/mt in June, according to data by S&P Global. Over Aug. 1-15, it slipped further to $4.29/mt, the data showed.

Most recently, Fujairah's HSFO bunker premium also dropped to a near nine-month low of $2.50/mt, which was last assessed lower at a discount of 19 cents/mt Nov. 18, 2022, before inching up to $3.17/mt Aug. 15, S&P Global data also showed.

LSFO bunker demand was seen bumpy, though steadier at times, across the previous week ended Aug. 12 through Aug. 15, though delivered prices were seen narrowing against ex-wharf levels that could hurt suppliers' margins, according to bunker suppliers.

Ex-wharf marine fuel 0.5%S bunker cargoes for August term contractual supply at Fujairah were mostly concluded at premiums in the range of $4-$13/mt to the benchmark FOB Singapore Marine Fuel 0.5%S cargo values, traders told S&P Global, wider than the $2-$7/mt premiums inked for July's supply.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the benchmark FOB Singapore Marine Fuel 0.5% sulfur cargo values averaged $5.47/mt across July, up from $3.79/mt in June but below $5.97/mt Aug. 1-15, S&P Global data showed.