FUJAIRAH DATA: Oil product stockpiles drop as traders cite ship fuel demand

Stockpiles of oil products at the UAE's Port of Fujairah dropped for the second consecutive week on April 29 as more ship fuel demand eroded heavy distillates supplies, according to data from the Fujairah Oil Industry Zone and traders at the world's third-biggest bunkering hub.

Total inventories fell 3.9% to 20.796 million barrels in the week ended April 29, a three-week low, the FOIZ data published May 1 showed. Stockpiles have increased 20% since the end of 2023.

Stocks of heavy distillates used for power generation and ship fuel dropped 8.2% to 9.882 million barrels, also a three-week low.

Traders cited increased demand for both low-sulfur and high-sulfur fuel oil used in shipping, leading to increased premiums over Singapore, the world's largest ship fuel hub. Some suppliers of LSFO required eight days to fill orders, as opposed to a typical five or six days, local bunker suppliers said.

The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values reached $22.34/mt on April 22, the highest since Jan. 12. The premium was $11.95/mt on April 30 and averaged $16.63/mt over April 16-30, up from $14.27/mt during the first half of the month. Platts is part of S&P Global Commodity Insights.

As for HSFO, "barging slots remain tight [for refueling schedules] through early May," a Fujairah-based trader said.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo averaged $34.95/mt in April, almost double the March average of $19.40/mt.

Inventories of middle distillates declined 2.7% on the week to 3.466 million barrels, a four-week low, while light distillates climbed higher by 1.9% to 7.448 million barrels, the first increase in three weeks.

So far since the end of 2023, stocks of light distillates have surged 59%, heavy distillates have dropped 2.6% and middle distillates have risen 38%.