FUJAIRAH DATA: Oil products stocks rangebound as of Dec. 25, reducing fuel oil supply

Stockpiles of oil products at the UAE's Port of Fujairah declined 7.7% in the week ended Dec. 25, with inventory levels across the barrel remaining in an established range, data from the Fujairah Oil Industry Zone showed Dec. 27.

The total volume dipped to 17.336 million barrels as of Dec. 25, lower week on week but up from the week prior to that, according to FOIZ data. It started 2023 at 20.349 million barrels.

Stocks of light distillates, such as gasoline and naphtha, fell 7.8% week on week to 4.687 million barrels, ending a two-week build. Middle distillates, such as diesel and jet fuel, rose 4.1% week on week to 2.506 million barrels, reversing a three-week decline.

Heavy distillates, such as fuel oil used for shipping and power generation, fell 10.1% week on week to 10.143 million barrels.

The decrease came as fuel oil exports from Fujairah in the week started Dec. 18 averaged 120,300 b/d, down from 322,000 b/d the previous week, according to S&P Global Commodities at Sea data.

Uncertainty surrounding the Kuwaiti Al-Zour refinery's future 0.5% sulfur fuel oil export plans have lifted values for the fuel in December as Fujairah last received an Aframax-sized cargo in early October, while one of the local refineries reportedly slowed 0.5%S fuel oil production cycles in recent weeks too, according to market sources.

Low sulfur fuel oil inventories declined as buyers sought forward bunker requirements in advance of the year-end holidays, supporting downstream premiums, local traders said.

"There was quite a lot of LSFO demand for [balance] December requirements [in the week ended Dec. 22], but the market is quieter this week with more players away on holidays too," a Fujairah-based bunker supplier said Dec. 27.

Platts, part of S&P Global Commodity Insights, assessed the Fujairah-delivered marine fuel 0.5% bunker premium over benchmark FOB Singapore marine fuel 0.5% cargo values at an average of 428.39/mt over Dec. 1-27, up from $20.52/mt across November.

Meanwhile, in the high sulfur fuel oil market, some players keen to move their stocks were seen offering aggressively to capture inquiries with substantial volumes, according to traders.

Due to downstream competition in the HSFO market, the Fujairah-delivered 380 CST HSFO bunker premium over FO 380 CST 3.5% FOB Arab Gulf cargo sank to an average of $3.24/mt over Dec. 1-27, from $25.24/mt in November, S&P Global data showed.

China has set its 2024 fuel oil import limit at 20 million mt, up from 19.2 million mt for 2023, according to a policy document released by the Ministry of Commerce on its website late Dec. 26. A total of 208 companies are allowed to apply for fuel oil import quotas within the annual limit, the document dated Dec. 22 showed. The number of companies rises from 165 for 2023.