FUJAIRAH DATA: Oil product stocks fall for first time in three weeks

Stockpiles of oil products at the UAE's Port of Fujairah fell for the first time in three weeks as of June 10, led by a decline in heavy distillates used in power generation and ship bunkering, according to data from the Fujairah Oil Industry Zone.

Total inventories fell 3.9% on the week to 20.731 million barrels in the week ended June 10, the FOIZ data published June 12 showed. All product categories showed declines in the week after across-the-board gains the week earlier, bringing them back to a two-week low.

Heavy distillate inventories fell 5.9% to a three-week low of 10.068 million barrels in the latest week. Inventories of middle distillates such as diesel and jet fuel slipped 5.3% to a two-week low of 3.526 million barrels, while those of light distillates such as gasoline and naphtha edged 0.1% lower to 7.137 million barrels. So far since the end of 2023, stocks of light distillates have climbed 52%, those of heavy distillates are little changed and those of middle distillates have risen 41%.

Overall, stockpiles have increased by 20% since the end of 2023.

Ship fuels

Demand for low-sulfur ship fuel has been on the upswing in the past week, while demand for high-sulfur fuel oil has remained relatively strong, traders said.

Barge availabilities for LSFO refueling are mostly being offered six days out, which is about normal, although some local bunker suppliers are not offering refueling until at least June 24, sources said. This has led to increased premiums over Singapore cargo.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo rose to a three-month high of $13.19/mt on June 7 and has averaged $11.17/mt so far in June, up from an average of $10.23/mt for all of May, according to S&P Global Commodity Insights data. The premium was down to $8.28/mt as of June 11, the data showed.

Fujairah's HSFO demand has kept up with supply, with support expected to continue as more ships call for bunkering at the port as a result of Red Sea missile attacks on commercial shipping, a bunker trader said. Some ships have diverted their voyages from the Red Sea to take the longer route around the southern tip of Africa.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo averaged $31.83/mt over June 3-11, down from $38.59/mt in May and $34.95/mt in April, Commodity Insights data showed.

Fuel oil exports shot up to 2.68 million barrels in the week started June 3 from 1.42 million barrels a week earlier, marking the highest volume in four weeks, according to Kpler data. Singapore was the top destination in the latest week, with almost 2.1 million barrels, while nil shipments headed for Saudi Arabia, the data showed. Demand for fuel oil for power generation in the Middle East during the summer usually climbs for cooling, and traders have largely agreed the seasonal pickup has yet to take hold this year.