Singapore — Stocks of heavy distillates and residues in Fujairah have surged to a 15-month high this week, as steady bunker demand and ample fuel oil supply persisted in the market.
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Heavy stocks rose 3% on the week to 10.373 million barrels in the week to March 25, and were last higher in December 2017, data released by the Port of Fujairah showed late Wednesday.
Stocks have trended higher for the third consecutive week, the data showed. The heavy distillate stocks category includes fuel oil and other heavy fuels used in marine bunkers and power generation.
"Supply is more than enough, but uptake is only average," a Fujairah bunker supplier said late Wednesday.
Monthly bunker demand for March was pegged between 700,000-800,000 mt, largely unchanged from February, according to various market sources based in Fujairah.
Meanwhile, fuel oil supply has been flowing in regularly with no tightness seen.
The Middle Eastern countries have been supplying fuel oil constantly as domestic demand has yet to rise, market sources said this week.
"Demand for power generation is not that much [in the Middle Eastern countries]. It is still not so hot," an industry source based in Singapore said Thursday.
Fuel oil exports from Iran are estimated at around 1.2 million-1.5 million mt/month in the first quarter of this year, but the exports have dropped to below 1 million mt/month after the re-imposition of US sanctions in November last year, trade sources said. Iranian cargoes are believed to be supplied in the Fujairah bunker market, according to market sources in the Middle East.
Meanwhile, Iraq's exports are stable at about 700,000 mt/month, another fuel oil trader said.
In the spot fuel oil market, Saudi Aramco Mobil Refinery, or Samref, sold 80,000-89,000 mt of fuel oil from Yanbu for loading over March 28-30, Platts reported previously.
Kuwait Petroleum Corporation recently sold two 80,000-mt cargoes for March loading and another for March 30-April 1 loading. KPC typically sells one to two spot cargoes a month.
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