Stockpiles of oil products at the UAE's Port of Fujairah fell 7.1% in the week ended March 13, led by a 12% decline in heavy distillates used for power generation and marine bunkers, according to Fujairah Oil Industry Zone data published March 15.
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Total inventories were 19.407 million barrels as of March 13, the lowest since Feb. 14, the FOIZ data provided exclusively to S&P Global Commodity Insights on March 15 showed. It was the third consecutive weekly decline after the 31% increase in the week ended Feb. 20, the biggest weekly gain in one year.
Heavy distillates stockpiles fell to 10.15 million barrels as of March 13, a four-week low. It was the second consecutive drop after jumping a record 51% in the week ended Feb. 20.
Inventories of middle distillates such as diesel and jet fuel jumped 14% on the week to 2.521 million barrels, a seven-week high. The products had been at the lowest since April 2022 as of Feb. 27.
Light distillates including gasoline and naphtha fell 5.8% to 6.736 million barrels, the third consecutive weekly drop and the lowest since Dec. 19, 2022.
Total stockpiles are now 6.1% lower than at the end of 2022. Heavy distillates are up 0.4% so far in 2023, light distillates have dropped 9.8%, while middle distillates have shrunk 18% over the same period.
Bunker demand capped
Low and high sulfur fuel oil bunker demand at the port of Fujairah remained subdued in recent weeks, whereas cargo exports from the region mostly contributed to the recent stock draws, according to local traders.
Moreover, aggressive offers by players at Khor Fakkan also added to the woes of Fujairah's bunker suppliers, who are already facing limited inquiries amid lessened requirements in the end-user market, traders also said.
"HSFO and LSFO markets are still quiet, competition from Khor Fakkan is also killing demand here," a Fujairah-based bunker supplier said March 15.
The Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessments strengthened to average $47.77/mt March 1-14, compared to $36.68/mt in February, according to data by S&P Global.
Although recent HSFO arbitrage flows lent support to downstream bunker premiums since March, dwindling demand also sparked mixed sentiments among sellers as the supply and barge availabilities were seen ample for prompt deliveries within six days ahead, Fujairah's bunker suppliers said
A shipment comprising 503,650 barrels, or 79,314 mt, of fuel oil products was loaded from Fujairah port and scheduled to land at the world's largest bunker hub of Singapore, according to Kpler shipping data.
Another smaller fuel oil cargo amounting to 251,485 barrels, or 39,604 mt, was most recently loaded from Fujairah on March 13 and supposedly headed East of Suez, Kpler data showed.
Platts Fujairah-delivered marine fuel 0.5%S bunker premiums over the benchmark FOB Singapore Marine Fuel 0.5%S cargo assessments slipped to average $7.48/mt March 1-14, almost halved the $14.11/mt across February, data by S&P Global showed.
The latest LSFO cargo exported from Fujairah totaled 859,805 barrels, or 135,402 mt, on March 4 was bound for discharge at the port of Singapore on March 17, according to Kpler data.