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

Stockpiles of oil products at the UAE's Port of Fujairah dropped 6.4% in the week ended Oct. 16, the first decline in three weeks, according to data from the Fujairah Oil Industry Zone.

The total fell to 18.509 million barrels as of Oct. 16, after climbing 20% in the previous two weeks, the FOIZ data published Oct. 18 showed. The total stockpile is now down 10% since the end of 2022.

Middle distillates such as jet fuel and diesel led the decline, falling 35% in the week to 1.631 million barrels, the lowest in six weeks, the data showed. Light distillates slipped 6.1% to 5.467 million barrels, a two-week low, while heavy distillates used as fuel oil for power generation and shipping were little changed at 11.411 million barrels.

Oil product exports excluding fuel oil from Fujairah averaged an estimated 4.8 million barrels in in the week that began Oct. 9, the most in 10 weeks, according to S&P Global Commodities at Sea data. Saudi Arabia was the destination for 278,000 barrels of jet fuel/kerosene, the most since September 2019, and 255,500 barrels of gasoline and blendstock. Fuel oil exports averaged 455,300 barrels in the latest week, the lowest since the week that began May 29.

Heavy distillates stockpiles are up 13% so far in 2023, while light distillates have dropped 27% and middle distillates have declined 47% over the same period.

Demand fluctuates

Despite lukewarm bunker demand for the low sulfur fuel oil grade, a healthier relative demand landscape for high sulfur fuel oil may have capped overall fuel oil stockpiles in Fujairah, local traders said.

Specifically, heavy residue stocks recorded only a marginal 0.3% weekly decline, equivalent to 36,000 barrels, in the week ended Oct. 16, FOIZ data showed.

Volumes of HSFO inquiries have been fluctuating over the past few trading sessions, as some buyers deferred requirements amid stronger international crude oil prices, according to Fujairah-based bunker suppliers, while this has also limited LSFO refueling demand too.

"Stronger Brent [crude prices] won’t be helping, the market has been [sometimes] quiet on inquiries. [Barging] slots remain available on very prompt basis by a couple of suppliers," a Fujairah-based trader said Oct. 18.