FUJAIRAH DATA: Oil products stocks drop to seven-week low on fuel oils slump

Oil products inventories at the UAE's Port of Fujairah dropped 4.9% in the week ended May 12, led by an 11% slump in heavy distillates used as fuel oils for power generation and shipping, according to Fujairah Oil Industry Zone data published May 14.

Total stocks fell to 19.735 million barrels, the lowest in seven weeks. Fuel oils declined to 9.339 million barrels, the lowest in three months.

Middle distillates such as diesel and jet fuel rose 1.9% to 1.762 million barrels from a seven-month low a week earlier. Light distillates such as gasoline and naphtha climbed 1% to a three-week high of 8.634 million barrels.

Fuel oil exports from Fujairah are averaging 341,000 b/d for May, with record shipments heading to India, Japan, the Philippines and Tanzania, compared with 248,000 b/d in April, according to S&P Global Commodities at Sea cargo-tracking data. The figures are tentative and may change when more shipping data is available.

On diesel, some 22,000 b/d are heading for Saudi Arabia this month, marking the first shipment since September 2024.

Platts, part of S&P Global Energy, assessed 0.5% sulfur fuel oil delivered to Fujairah at $506/mt on May 13, extending gains to 7.2% since May 5. The Platts-assessed high sulfur fuel oil delivered to Fujairah was at $422/mt on May 13, up 7.9% since May 5.

Sentiments for supply fundamentals in the low sulfur fuel oil segment around the Fujairah hub were generally more supported than before, as traders anticipate smaller spot arbitrage volumes of replenishment cargoes originating within the region, such as cargoes sourced from Kuwait, for the upcoming summer months.

LSFO bunker demand since May has mostly also been steadier than most of April, with a "flurry of inquiries" on some of the recent trading days, according to local bunker suppliers.

As a result, premiums for LSFO ex-wharf cargoes gradually rose, whereas some competition in the downstream market still capped delivered valuations.

In addition, bunker demand in the HSFO segment has mostly remained healthy since May to date, thereby lessening barge availabilities for very prompt refueling requirements. However, stiff competition in Fujairah and nearby Khor Fakkan hubs pressured downstream premiums.

Still, stable HSFO demand flows enabled traders to move their cargoes, while overall inventories were seen mostly adequate in the near term.