FUJAIRAH DATA: Oil products inventories rebound with fuel oils

Oil products inventories at the UAE's Port of Fujairah climbed 4.2% in the week ended May 19, making up for almost all of the prior week's drop as fuel oils rebounded, according to Fujairah Oil Industry Zone data published May 21.

The total increased to 20.562 million barrels after falling 4.9% the week before. Heavy distillates used as fuel oil for power generation and shipping increased almost 18% to 10.99 million barrels from a three-month low a week earlier.

Middle distillates, such as diesel and jet fuel, dropped almost 27% to 1.295 million barrels, the lowest since April 2022. Light distillates, such as gasoline and naphtha, fell 4.1% to 8.277 million barrels, the lowest in three weeks.

Gasoil and diesel shipments from Fujairah are averaging 130,000 b/d for May, the most since April 2024, and up from 107,000 b/d last month, according to S&P Global Commodities at Sea cargo-tracking data. The figures are tentative and may change when more shipping data is available.

Sluggish demand

Abundant near-term supplies in the low and high sulfur fuel oil markets have intensified competition among suppliers, putting pressure on downstream premiums.

With sufficient LSFO barge availability to meet most buyers' prompt requirements, suppliers competed to fill these slots and were eager to move their cargoes, according to market sources.

Despite moderate demand thus far in May, LSFO premiums have remained in the single-digit range. However, offers for ex-wharf barrels have strengthened, reflecting a trend aligned with more optimistic sentiments regarding forward supply dynamics.

"Compared with supply conditions, there is not enough demand," a Fujairah-based trader said. "With delivered prices at these low levels versus ex-wharf [prices], challenging times could continue."

Platts, part of S&P Global Commodity Insights, assessed the Fujairah-delivered 0.5%S marine fuel bunker premium over the benchmark FOB Singapore Marine Fuel 0.5%S cargo value at an average of $6.99/mt in May as of the 20th, down from $9.22/mt in April.

HSFO premiums have also faced challenges due to intense competition, as the Fujairah hub is anticipated to remain well-supplied for the rest of May, with adequate replenishment inflows expected for the rest of the month.

The Platts assessed Fujairah-delivered 380 CST HSFO bunker premium to the fuel oil 380 CST 3.5%S FOB Arab Gulf cargoes fell to an over 16-month low of $10.19/mt on May 20, after declining $2.60/mt day over day. The premium was last lower at $6.23/mt on Jan. 23.

Fujairah's HSFO bunker premium averaged at $18.98/mt over May 2-20, declining from $29.55/mt in April.