- Delays in bunker barge reloads.
- Demand firmer than expected.
- LSFO replenishment cargoes replenish stocks.
Inclement weather around the UAE’s bunker hub of Fujairah has slowed downstream refueling operations and reloading of bunker barges at the local terminals, whereas downstream demand was seen at least moderate despite disruptions, reports Platts.
Refueling delays likely at Fujairah
“Some [suppliers] are facing loading delays [from terminals] so they are offering out for later dates, only a few can do prompts,” a Fujairah-based trader said Feb. 20, adding that suppliers also sought to clear the mounting backlog of orders as soon as possible.
In the offshore regions of the UAE, forecasts for strong winds and sea swells as high as 8-9 feet during Feb. 20-21 are expected to hamper refueling operations, and are only likely to ease from Feb. 22-23 onward, according to the latest report by UAE’s National Center of Meteorology (NCM) Feb. 20.
Even though overall bunker demand during February is typically one of the slowest months of the entire year, traders estimated recent sales volumes to be “quite reasonable” and possibly outperforming previous years.
“Bunker demand isn’t too bad … There’s delivery delays and some suppliers encountered [logistical] issues, but nothing critical,” a Fujairah-based bunker supplier said Feb. 20.
Despite the bad weather events, the low sulfur fuel oil supply situation was seen “not that severe” either, as some suppliers were less affected by delays compared to others, traders said.
While the Red Sea disruptions and route deviations lifted demand for high sulfur fuel oil bunker in Fujairah, traders noted that LSFO sales volumes were recently more supported in recent couple of weeks.
Heavy residue stocks in Fujairah, utilized as fuel oil for power generation and for shipping, tumbled 2.5% to a two-week low of 9.352 million barrels in the week ended Feb. 12, according to latest Fujairah Oil Industry Zone and shipping data.
“February as been a busy month, cargoes are fully booked. We are tied up and aren’t keen to sell more. March delivery period is the earliest [for any subsequent deals],” a second bunker supplier said Feb. 20.
To a certain degree, the adequate LSFO stockpiles at Fujairah also pressured downstream bunker premiums, owing to the replenishment cargoes sourced from Kuwait’s Al-Zour refinery, of which arrivals totaled approximately 200,000 mt between January and so far in February, industry sources said.
The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values averaged lower at $13.95/mt Feb. 1-19, from $18.35/mt across January, according to data by to S&P Global Commodity Insights
Fujairah’s bunker sales jumped to a five-month high of 679,004 cu m in January, 2.4% higher on the month and 6% up year on year, latest FOIZ data showed.
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Source: Platts
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