FUJAIRAH DATA: Oil product stocks drop as fuel oil exports pick up

Stockpiles of oil products at the UAE's Port of Fujairah fell 4.6% in the week ended March 6, with heavy distillates falling from a 13-week high, according to Fujairah Oil Industry Zone data published March 8.

Total inventories were 20.881 million barrels as of March 6, a three-week low, the FOIZ data provided exclusively to S&P Global Commodities Insights on March 8 showed. It was the second consecutive weekly decline after the 31% increase for the week ended Feb. 20, the biggest weekly gain in one year.

Heavy distillates used as fuel oil for power generation and marine bunkers declined 13% week on week to 11.512 million barrels as of March 6, a three-week low. It was the first drop in three weeks, after jumping a record 51% in the week ended Feb. 20.

Middle distillates such as diesel and jet fuel jumped 56% week on week to 2.218 million barrels March 6, a four-week high. The products had been at the lowest since April 2022 as of Feb. 27. The hike is not the record-increase, after almost doubling in the week ended Jan. 17, 2022.

Light distillates including gasoline and naphtha fell 1.7% week on week to 7.151 million barrels March 6, the lowest in five weeks.

Fuel oil exports from Fujairah in the week started Feb. 27 climbed to 3.808 million barrels, the highest since early October, according to Kpler shipping data. Around 503,000 barrels of fuel oil were headed for the US, the first such shipment from Fujairah since December, while a record 1.609 million barrels were headed for India, according to the data.

LSFO, HSFO demand weak

Demand for low and high sulfur fuel oils for shipping is weak, similar to the pattern in February, traders said.

"There isn't much demand for HSFO in March either," a Fujairah-based bunker supplier said March 7, adding that shipment flows to Asia may have contributed to the drop in heavy distillates inventories.

Approximately 1.14 million barrels, or 179,927 mt, of HSFO was loaded at Fujairah's oil terminals over March 4-6 and was headed for the world's largest bunker hub of Singapore, Kpler shipping data shows.

The dirty Arab Gulf-Singapore FO 380 Aframax freight rates averaged $33.61/mt March 1-7, changing little from $32.78/mt for all of February and down from $40.37/mt for January, according to S&P Global data.

Reduced HSFO stockpiles has led to higher bunker premiums at Fujairah and longer barge refueling schedules, local bunker suppliers said.

The Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessments rose to average $51.05/mt March 1-7 from $36.68/mt across all of February, data by S&P Global showed.

LSFO supplies from Kuwait's Al-Zour refinery are helping to push delivered premiums down, traders said.

Platts Fujairah-delivered marine fuel 0.5%S bunker premiums over the benchmark FOB Singapore marine fuel 0.5%S cargo assessments averaged $8.12/mt March 1-8, down from $14.11/mt across February, S&P Global data shows.

Total oil product stockpiles at Fujairah are now 0.1% bigger than at the end of 2022. Heavy distillates are up 14% so far in 2023, light distillates have dropped 4.2%, while middle distillates have shrunk by 28% over the same period.