FUJAIRAH DATA: Oil product stocks rise to three-month high

Stockpiles of oil products at the UAE's Port of Fujairah rose to a three-month high in the week to Oct. 9, though still lower compared with levels seen a year earlier, according to data from the Fujairah Oil Industry Zone.

Total inventories rose 6.4% to 19.8 million barrels, the highest since July 10, FOIZ data provided exclusively to S&P Global Commodity Insights showed. The stockpile stood at 24.9 million barrels on Oct. 10, 2022.

In the week to Oct. 9, light distillates increased 26.9% to a three-week high of 5.8 million barrels, while middle distillates rose 7% to 2.5 million barrels.

Heavy distillates used as fuel oil for power generation and shipping dropped 1.8% over the week to 11.4 million barrels, the data showed.

Oil product exports excluding fuel oil from Fujairah averaged an estimated 795,000 b/d in the week from Oct. 2, the most since the week started April 17 and led by shipments to South Korea, according to S&P Global Commodities at Sea data. Fuel oil exports averaged 93,000 b/d in the latest week, the lowest since June 12.

Bunker demand mixed

While robust demand in the high sulfur fuel oil segment at Fujairah drew down elevated stockpiles, buyers' appetite for low sulfur fuel oil have remained tepid, or moderate at best, according to local traders.

The steady HSFO demand from shipowners have recently spiked delivered premiums, though the more-than-adequate cargo availabilities are bound to cap upsides on any significant surge for the near term, traders said Oct. 11.

"Most of the [HSFO] market have prompt barge and cargo availabilities on offer," a Fujairah-based trader said Oct. 11, with the exception of one supplier with tighter refueling schedules through the third week of October.

The Platts Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo values rose to average $39.11/mt Oct. 2-10, compared with $12.99/mt for all of September, S&P Global data showed.

On the other hand, lean demand for LSFO bunker seeded bleakish sentiments among most segments of the market, with players keen to move cargoes by offering out at competitive premiums, traders said.

"Although Fujairah's LSFO demand fluctuates, we aren't seeing any improvement yet," a local bunker supplier said Oct. 11.

"There's no news yet on Al-Zour's expected LSFO export volumes recently too," the bunker supplier also said, suggesting that uncertainties over arrival schedules of subsequent replenishment stocks might support the ex-wharf market to a certain degree.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the benchmark FOB Singapore marine fuel 0.5% sulfur cargo values slipped to average $4.10/mt Oct. 2-10, from $6.52/mt across September, according to S&P Global data.