FUJAIRAH DATA: Oil product stocks rise to 5-week high as exports slow

Stockpiles of oil products at the UAE's Port of Fujairah rose 2.7% in the week ended March 27, led by a 5.5% increase in light distillates such as gasoline and naphtha, according to Fujairah Oil Industry Zone data published March 29.

Total inventories rose to 21.919 million barrels March 27, a five-week high, the FOIZ data provided exclusively to S&P Global Commodities Insights showed. It was the second consecutive weekly increase.

Exports of oil products excluding fuel oil dropped to 3.25 million barrels in the week started March 20, the lowest in five weeks, according to Commodities at Sea data by S&P Global. Fuel oil shipments came to 446,000 barrels -- all to Singapore -- up from 305,000 barrels in the week started March 13 but well below the 1.3 million barrels registered in the prior week started March 6, the data showed.

Stockpiles of heavy distillates used for power generation and ship fuel increased 1.7% in the week ended March 27 to 11.602 million barrels, a four-week high, according to the FOIZ data.

Middle distillates such as diesel and jet fuel edged down 0.7% to 2.595 million barrels, the first drop in four weeks, after surging 84% over the previous three weeks.

Light distillates increased 5.5% to 7.722 million barrels, the highest in five weeks.

Fujairah fuel oil exports have averaged 94,000 b/d in March, with Saudi Arabia the top destination at 22,000 b/d, up from 18,000 b/d in February, according to Commodities at Sea data. Shipments of other oil products including gasoline and jet fuel have averaged 554,000 b/d so far in March, compared with 653,000 b/d in February. Singapore is the top indicated destination at 186,000 b/d so far in March, the highest rate since Commodities at Sea began tracking the data in late 2016.

Supplies of low sulfur and high sulfur fuel oil for shipping are plentiful while demand is sluggish, putting pressure on Fujairah premiums, traders said.

"Even though we are offering out for further [LSFO delivery] dates, demand is also a little thin," a Fujairah-based bunker supplier said March 29, predicting that demand is likely to be slow through early April.

Moreover, sea swells and strong winds in recent days have intermittently disrupted bunker deliveries and loading operations, especially for ship-to-ship transfers at offshore anchorages, S&P Global previously reported.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the benchmark FOB Singapore marine fuel 0.5% sulfur cargo assessment averaged $8.68/mt March 1-28, down from $14.11/mt in February, S&P Global data showed.

The Fujairah delivered assessment is compared against the Singapore cargo because the benchmark cargo market at the world's largest bunker hub reflects more trading activity during the daily Platts Market on Close process than the FOB Fujairah cargo market. Cargoes of 0.5% sulfur fuel oil in Singapore are for 20-40kt compared with 500-1500 kt for delivered assessments. The FOB Singapore cargo benchmark assessment is based on trading activity occurring in the Platts MOC process.

HSFO stocks

Expectations of rising HSFO stockpiles through most of April has led some suppliers to offer parcels at lower rates to spur demand, according to Fujairah-based traders.

"As crude oil prices made a recovery last couple of days, unhedged players are moving against the market to offer [bunker fuels] at extremely low prices," a second bunker supplier said. Platts assessed Dated Brent up 3.4% day on day at $77.84/b March 28, according to S&P Global data.

Deliveries of HSFO can be made within three days, a relatively short time period, local bunker suppliers said.

Buyers have also put off purchases of HSFO ex-wharf cargo as premiums for the grade are expected to come under further pressure, traders said.

The Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the fuel oil 380 CST 3.5% FOB Arab Gulf cargo assessment averaged $41.24/mt March 27-28, down from $44.06/mt during the previous week ended March 24, according to S&P Global data.

Total oil product stockpiles at Fujairah are now up 6% since the end of 2022. Heavy distillates are up 15% to date in 2023, light distillates have risen 3.4% while middle distillates have shrunk by 16% over the same period.