FUJAIRAH DATA: Oil product stockpiles drop to four-month low as demand rises

Stockpiles of oil products at the UAE's Port of Fujairah declined 13% in the week ended Feb. 19, the biggest weekly drop in seven months, according to latest data from the Fujairah Oil Industry Zone.

The total fell to 16.648 million barrels as of Feb. 19, the lowest in four months and the biggest weekly drop since the week started July 17, the data published Feb. 21 showed. This was the first time this year that stockpiles have been lower than the end of 2023, down 4% since.

Demand for fuel oils has picked up, for both exports and for ship refueling. But all product categories showed declines, signaling a more widespread rebound in consumption.

Heavy distillates used as fuel oil for power generation and for shipping declined 11% to a seven-month low of 8.305 million barrels. Light distillates such as gasoline and naphtha fell 9.2% to a five-week low of 6.293 million barrels. Middle distillates dropped 29% to 2.050 million barrels, a seven-week low. So far since the end of 2023, stocks of light distillates have risen 34% after a 55% surge in the first week of 2024, while inventories of both middle distillates and heavy distillates fell 18% over the same period.

Fuel oil exports rose to 711,400 barrels in the week started Feb. 12, from 404,400 barrels a week earlier, according to S&P Global Commodity Insights data. Shipments of other refined products decreased to an estimated 1.8 million barrels, from 2.2 million barrels a week earlier, the data showed.

Bunker demand at the port for all fuel grades has strengthened since mid-February, with the upturn in low sulfur fuel oil notable following months of weakness, traders said.

Some traders said the gains were due to more ships refueling at the port before taking longer routes around the tip of Africa instead of the Red Sea. Some other traders said the Red Sea was not a factor yet in bunker demand at the port.

The recent pickup in demand may not persist this week, as strong winds and sea swells offshore have slowed reloading of bunker barges. Sea swells as high as 9 feet over the Oman Sea were forecast through Feb. 21, according to the UAE's National Center of Meteorology.

"Deliveries are still on and off ... safety of both vessels are of paramount concern," a Fujairah bunker supplier said.

Premiums have declined for LSFO and increased for HSFO so far this month, compared with January, according to S&P Global data. The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values averaged $13.67/mt over Feb. 1-20, down from $18.35/mt in January. Platts assessed Fujairah-delivered 380 CST HSFO bunker premium to the FO 380 CST 3.5% FOB Arab Gulf cargo at an average of $23.13/mt over Feb. 1-20, up from $8.74/mt in January.

"The number of inquiries increased lately, and demand has been good, although competition was stiff," a Fujairah bunker supplier said.