FUJAIRAH DATA: Oil product stocks hit four-week low, middle distillates decline most

Stockpiles of oil products at the UAE's Port of Fujairah dropped 1.3% in the week ended May 1, with all categories showing declines except for heavy distillates, according to data published May 3 by the Fujairah Oil Industry Zone.

Total inventories fell to a four-week low of 19.693 million barrels as of May 1, the FOIZ data provided exclusively to S&P Global Commodity Insights showed. The decline followed a 13% slide in week ended April 24, the biggest drop in 2023. The total is now down 4.7% since the end of 2022.

Light distillates, including gasoline and naphtha, fell 1.6% on the week to 6.761 million barrels, also a four-week low. Middle distillates, such as diesel and jet fuel, decreased 13% on the week to 2.976 million barrels, a three-week low. Heavy distillates, used as fuel oil for power generation and as ship, fuel climbed 3.1% to 9.956 million barrels after falling 11% in the week ended April 24.

Oil product exports, except for fuel oil, from Fujairah averaged an estimated 534,100 b/d in April, the lowest since January, according to S&P Global Commodities at Sea data. While Singapore was the top destination in March at 210,900 b/d, Malaysia was at the top in April at 96,100 b/d, compared with Singapore's 62,100 b/d. Fuel oil shipments averaged 140,100 b/d in April, up from 113,800 in March, with Singapore the top destination at 43,800 b/d, taking over the Netherlands as the top destination in March at 25,200 b/d, the data showed.

Heavy distillates have slipped 1.6% so far in 2023, light distillates have declined 9.5%, while middle distillates have shrunk 3.6% over the same period.

Fujairah's bunker demand has been inconsistent and delays in barge refueling operations at local terminals due to logjams have further boosted overall fuel oil stockpiles, local traders said.

Congestions because of a backlog of vessels awaiting cargo works since the Eid holidays are expected to gradually ease through the first trading week in May, with more barges likely to reload for downstream bunker deliveries, traders said.

Weak demand for low sulfur fuel oil has also contributed to a stock build. Barge slots have been ample despite berthing delays at terminals, with lead times as prompt as one to four days, Fujairah-based bunker suppliers said.

The Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessment reached a near seven-week low of $6.43/mt on April 27, averaging $8.87/mt over April 24-28, compared with $11.44/mt a week earlier, according to S&P Global data.

A weaker HSFO market led some Fujairah sellers to stay on the sidelines in the week ended April 28, while limited offer volumes slowed inventory draw downs.

"Some [HSFO] suppliers were holding back, though overall [cargo] availabilities are okay," a Fujairah-based trader said, adding that merely a couple of suppliers were keen to offer for early-May deliveries in the prior week.

Stiff competition from HSFO sellers in the nearby Sharjah port of Khor Fakkan has diverted bunker demand from Fujairah and weakened delivered premiums following aggressive offers to capture inquiries, local bunker suppliers said.

The Platts Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessment fell to an average of $28.81/mt in April, from $45.26/mt in March. The premium was assessed $7.46/mt lower on the day at $29.84/mt May 2, S&P Global data showed.