FUJAIRAH DATA: Oil products stocks climb to three-month high

Oil products inventories at the UAE's Port of Fujairah rose 12% in the week ended Dec. 16, led by a rebound in heavy distillates and residues used as fuel oil for shipping and power generation, according to Fujairah Oil Industry Zone data published Dec. 18.

Total stocks increased to a three-month high of 17.811 million barrels, according to FOIZ data compiled by S&P Global Commodity Insights since 2017. Heavy distillates jumped 35%, extending large weekly changes for a fourth week. In the past three weeks, heavy distillates dropped 31%, climbed 37% and then dropped 25%.

The weekly increase left total stockpiles of heavy, middle and light distillates at the port up 2.7% since the end of 2023 after dropping 16% last year.

Inventories of heavy distillates increased to a two-week high of 8.657 million barrels, according to the data. Sales of ship fuels at Fujairah, the world's third-largest bunkering hub, slumped to a 17-month low in November, according to port data published Dec. 17. Stockpiles of heavy distillates have dropped 15% so far this year.

Middle distillates, such as jet fuel and diesel, edged 1.6% higher in the latest week to a two-month high of 2.468 million barrels. They have gained 1.5% so far in 2024.

Light distillates such as gasoline and naphtha fell 3.8% to 6.686 million barrels, marking the first drop in four weeks. They have expanded 43% so far this year.

Refined oil product exports from Fujairah averaged 441,000 b/d in December, the lowest since February, according to Kpler data. Pakistan is the leading destination, followed by Malaysia and South Korea. Product imports are averaging 611,000 b/d, the lowest since June, with Iraq the leading origin, followed by India and Iran, according to the data.

LSFO demand lags

Despite a slight rebound in buyers' downstream requirements over the past week, traders expect overall demand to lag behind supply build, especially in the low sulfur fuel oil segment, while high sulfur fuel oil cargo availabilities remained generally ample.

LSFO demand remained largely underwhelming, while a replenishment shipment of approximately 160,000 mt, reportedly sourced from neighboring Kuwait, landed at the Middle Eastern bunker hub of Fujairah during the week of Dec. 9-13, further adding to stockpiles, industry sources said.

"Fujairah is still flooded with much oil, and there are no premiums though [demand] recovered a little volume-wise," a Fujairah-based trader said on Dec. 18, citing supply pressures on LSFO valuations.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo averaged $8.78/mt over Dec. 16-17, down from $9.27/mt the previous week ending Dec. 13, Commodity Insights data showed.

In the high sulfur fuel oil sector, demand has been steadier than LSFO so far in December, buoying delivered premiums to some extent, though adequate inventories also capped any significant upside to valuations, traders said.

On both the LSFO and HSFO fronts, barging schedules for prompt refueling dates were mostly adequate, with no tightness likely in the near term, according to bunker suppliers, despite hopes for a stronger pickup in demand to help draw down inventories.

For some traders, demand this week ranged from "sluggish to moderate at best."

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf averaged $26.42/mt in November, down from $36.01/mt in October, Commodity Insights data showed. So far in December, it has averaged $22.14/mt through Dec. 16.