- Oil product stockpiles at the UAE’s port of Fujairah have fallen to a four-month low, led by a decline in fuel for power generation and marine bunkers.
- Total inventories stood at 18.747 million barrels on Aug. 2, down 10.5% from a week earlier and the lowest since March 22, the data showed.
A Platts news source by Claudia Carpenter and Nicholson Lim says that oil product stocks fall to four-month low as fuel oil exports rise.
Fuel for power generation and marine bunkers
Heavy distillates, which include fuel for power generation and marine bunkers, stood at 10.138 million barrels on Aug. 2, down 9.6% from the previous week and the lowest since April 12.
Bunker demand has been strengthening across many ports, including Fujairah, as economies recover from COVID-19 and generate more demand for goods shipped by sea, Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai, said.
Recent tanker incidents near Fujairah may lead shippers to be more cautious about traveling to the area for a few days but they are unlikely to stay away for long if no more vessels are attacked, he said.
Fujairah-delivered marine fuel 0.5%S bunker was assessed at $530/mt on Aug. 3, about 6% higher than at the start of June, Platts data showed.
Shipping incidents
Other sources said the recent shipping incidents could dent demand, eventually easing the tightening inventories.
“Despite bunker demand firming up over the past week to further tighten inventories, premiums are still depressed as the prices of Fujairah-delivered marine fuel 0.5%S lack support,” a Fujairah-based bunker supplier said.
The bunker supplier also said that traders are cautiously optimistic because bunker demand has outpaced the average of volumes sold in recent years.
The Fujairah bunker market
The Fujairah bunker market has seen a marked increase in demand for the very low sulfur fuel oil over the past few days, traders said. Some bunker suppliers are so eager to sell more product that it’s keeping prices competitive, halting a widening in premiums over the past few weeks in Fujairah-delivered marine fuel 0.5%S over Singapore marine fuel 0.5%S cargo assessments, industry source said.
The premium for Fujairah-delivered marine fuel 0.5%S against FOB Singapore 0.5%S averaged $1.55/mt during the first two trading days of August, compared with the July average of $1.65/mt, according to Platts data.
Fuel oil exports out of Fujairah
Fuel oil exports out of Fujairah averaged 356,000 b/d in July, a third consecutive month at more than 300,000 b/d, with shipments to Singapore, Malaysia, Saudi Arabia and Pakistan rising in recent months, according to Kpler data. Around 58,600 b/d of fuel oil was headed for Pakistan in July, close to the record 58,700 b/d sent in June 2018.
Inventories of light distillates, including gasoline and naphtha, stood at 5.473 million barrels on Aug.2, down 22.7% from the previous week and the lowest since June 21.
Middle distillates, including jet fuel and gasoil, rose 17.9% to 3.136 million barrels after hitting a 15-month low on July 26.
Total stockpiles fell 27% from the previous year, with heavy distillates and middle distillates falling 31% and 29%, respectively, over the same period. Light distillates fell 19% on the year, the data showed.
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Source: Platts
