- Drop led by 20% slump in middle distillates
- Inventories fall from 25-month high
- Heavy distillates drop most since Aug. 21
Oil product stockpiles at the UAE’s Port of Fujairah fell 9.9% in the week ended Oct. 17, the biggest slump since June and the first decline in four weeks, reports quoting the Fujairah Oil Industry Zone data published Oct. 19.
Fall in stockpiles
The stocks totaled 22.458 million barrels, the lowest in four weeks after hitting a 25-month high a week earlier, according to the FOIZ data shared exclusively with S&P Global Commodity Insights. The decline was widespread, led by a 20% tumble in jet fuel and other middle distillates to 3.169 million barrels, a four-week low.
Light distillates such as gasoline and petrochemical feedstock naphtha fell 4.4% on the week to 7.218 million barrels, also a four-week low, while heavy distillates used as fuels for power generation and marine bunkers declined 9.9% to 12.071 million barrels, the biggest drop since Aug. 21, from a 16-month high a week earlier.
There have been an unusually large number of offers for HSFO marine fuel with prompt deliveries of no more than four to six days, market participants said. In recent weeks, HSFO deliveries have been slower due to tight barge availabilities that delayed refueling, traders said.
“Prompt [HSFO deliveries] are available, albeit at additional premiums… There were more suppliers offering prompt stems in recent days,” a Fujairah-based trader said Oct. 19.
LSFO demand is weak
Platts Fujairah-delivered 380 CST HSFO premium to the FO 380 CST 3.5% sulfur FOB Arab Gulf cargo assessment averaged $46.36/mt over Oct. 3-18, down from $66.55/mt for all of September, according to data by S&P Global Commodity Insights.
Suppliers were mostly eager to offer out both the low and high sulfur fuel oil bunker grades, as weak demand has led to increased inventories in recent weeks, market sources said.
Yet, most of the LSFO bunker suppliers in Fujairah have ensured that barges were refueled to offer product aggressively even for prompt delivery dates, traders said, with delivery lead times between two to four days.
“Desperation is in the market as demand for LSFO is weak… Suppliers are simply faced with a choice between letting barges idle [and take losses] or secure fixtures so long as there is demand,” a Fujairah-based bunker supplier said.
The Platts Fujairah-delivered marine fuel 0.5%S bunker premium to the benchmark FOB Singapore marine fuel 0.5%S cargo assessment averaged $17.22/mt over Oct. 3-18, down from $35.55/mt in September and $93.94/mt in August, S&P Global data showed.
Total stockpiles were 43.19% higher than this time last year, with heavy distillates up 70.42%, light distillates 20% higher and middle distillates up 22.4% over the same period.
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Source: Platts
