- Middle distillates at five-month low.
- Fuel oil exports slowed in February.
Stockpiles of oil products at the UAE’s Port of Fujairah climbed 0.4% in the week ended March 4, as declines in middle and heavy distillates offset gains in light distillates, reports Platts according to the Fujairah Oil Industry Zone.
Decline in middle and heavy distillates
The total rose to 18.806 million barrels as of March 4, the highest in three weeks, FOIZ data published March 6 showed. Stockpiles have increased 8.5% since the end of 2023.
Heavy distillates used as fuel oil for power generation and for shipping dropped 3.7% to 8.973 million barrels, a two-week low.
Light distillates such as gasoline and naphtha jumped 6.6% to 8.290 million barrels, the highest in 10 months.
Middle distillates including jet fuel and diesel dropped 6% to 1.543 million barrels, the lowest in five months. Since the end of 2023, stocks of light distillates have ballooned 77% after a 55% surge in the first week while middle distillates dropped 38% and heavy distillates declined 12% over the same period.
Exports of products except for fuel oil climbed to an average 437,000 b/d in February, up from 424,000 b/d in January, the third consecutive monthly increase, according to S&P Global Commodities at Sea data. Fuel oil shipments averaged 99,000 b/d last month, down from 162,000 b/d in January and the lowest since November 2000.
Bunker demand healthy
Improvements in low sulfur fuel oil demand from end-users drew down stockpiles around Fujairah and gradually steady delivered premiums, while buyers’ appetites were largely undeterred despite the recent less-than-ideal weather conditions, traders said March 6.
“We are seeing quite a few of prompt LSFO requirements, although all are small stems,” a Fujairah-based trader said March 6, highlighting that flows of inquiries were largely healthy.
High winds and rough seas in recent weeks have intermittently disrupted bunkering operations, leading to a backlog of orders as some sellers already committed their LSFO barge availabilities for the next eight to nine days, according to local bunker suppliers.
“Quite a few suppliers are tight on dates due to bad weather too, so there is some pile up [of orders],” the trader said.
Amid limited slots for early refueling dates, some sellers were reportedly hoping to “capitalize on the tight market” by offering out very prompt stems at much steeper premiums, a second Fujairah-based trader said March 6.
The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values averaged higher at $14.62/mt March 1-5, from $13.12/mt for all of February, S&P Global Commodity Insights data showed.
In the high sulfur fuel oil segment, traders said that buyers’ requirements of substantial volumes and consistent downstream demand also slowed overall stock build, though supplies are still ample and some sellers offered competitively to fix deals comprising of larger parcels.
The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo fell $3.93/mt on the day, slipping to a near five-week low of $17.22/mt March 5, S&P Global data showed.
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Source: Platts
