Oil product stockpiles at the UAE's Port of Fujairah rebounded from a record low on gains in light and middle distillates such as gasoline, jet fuel and gasoil, showed data released Sept. 29 by the Fujairah Oil Industry Zone.
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The total inventory stood at 15.533 million barrels as of Sept. 27, up 3.6% from the previous week when stockpiles were the lowest since records started in January 2017, the data showed. Heavy distillates and residues used as fuel oils for power generation and marine bunkers bucked the trend, and declined 3.7% to 6.724 million barrels, the lowest since December 2018, according to the data provided exclusively to S&P Global Platts.
Product exports from Fujairah have been slowing in recent weeks, with only 264,000 barrels of light distillates set to be shipped out for the week started Sept. 20, down from 364,000 barrels a week earlier, according to commodity data company Kpler. All of the shipment is naphtha headed for Japan. Fuel oil exports were at 2.51 million barrels for the same week, a three-week low, while middle distillates were at 122,000 barrels, also a three-week low, with all of it gasoil/diesel headed for China, according to Kpler data. The fuel oil headed out was destined for Malaysia, Saudi Arabia and Kenya, the Kpler data showed.
"Fujairah is doing its role as a logistics and storage location in the region which will continue to happen," Chris Bake, member of the executive committee at Vitol, told the Fujairah APPEC virtual workshop 2021 organized by the Dubai-based Gulf Intelligence Sept. 28.
Fuel oil inventories may keep falling as traders who had waited for crude oil prices to fall before buying bunkers put in orders in recent days. Oil futures have declined after front-month Brent crude settled above $80/b Sept. 27 for the first time since October 2018.
"Bunker demand is only starting to firm up during the last trading week of September, compared to the below-average demand seen for most of the month," a Fujairah-based bunker supplier told Platts Sept. 29. LSFO and HSFO inventories are expected to keep falling, he said. A Fujairah-based trader said there have been "robust sales" of delivered 380 CST HSFO bunkers over the past week.
Barges have been busy re-fueling from storage tanks to fill orders for delivered bunkers concluded in August, contributing to the drop in heavy distillates inventories over the past week, industry sources said.
Based on Platts data, premiums of Fujairah-delivered marine fuel 0.5%S over the benchmark Singapore marine fuel 0.5%S cargo assessments averaged $1.81/mt over Sept. 22-28, up from an average of $1.57/mt over Sept. 15-21.
Light distillates inventories including gasoline and naphtha for petrochemicals production stood at 5.111 million barrels as of Sept. 27, up 3.1% from a week earlier, while middle distillates such as jet fuel and gasoil rose 21% to 3.698 million barrels. Both categories were at three-week highs.
Total stockpiles were 27.5% lower on the year, and were led by heavy distillates which fell 33.2% in the past year. Light distillates were down 23.2% and middle distillates fell 21.4%.