Stockpiles of oil products at the UAE’s Port of Fujairah climbed for the first time in a month with gains registered across all product categories, reports Platts quoting the Fujairah Oil Industry Zone data published March 22.
Total inventories rise
Total inventories rose 10% in the week ended March 20 to 21.338 million barrels, the first gain since the week ended Feb. 20, the FOIZ data provided exclusively to S&P Global Commodities Insights on March 22 showed. Stockpiles had dropped 13% in the previous three weeks ended March 13.
Products exports slowed in the week started March 13, to 2.37 million barrels, from 4.62 million barrels a week earlier, Kpler data showed. Fuel oils shipments slumped to 1.542 million barrels, the lowest in three weeks. Exports also slowed for naphtha, while gasoline and gasoil shipments returned after no exports in the week started March 6.
Stocks of heavy distillates used as fuel oils for power generation and ship fuel jumped 12% to 11.407 million barrels as of March 20, a two-week high.
Middle distillates inventories such as diesel and jet fuel rose 3.7% to 2.614 million barrels, an eight-week high. The products had been at the lowest since April 2022 as of Feb. 27.
Light distillates inventories including gasoline and naphtha advanced 8.6% to 7.317 million barrels, a four-week high after dropping in the week ended March 13 to the lowest since Dec. 19, 2022.
Lackluster demand for both low and high sulfur fuel oils along with increased competition from nearby ports led to the increased stockpiles of heavy distillates, according to Fujairah-based traders.
“Competition from Khor Fakkan’s players is still very stiff, their pricing certainly seems unrealistic. So, [Fujairah’s] LSFO bunker demand is not consistent, only better on some days,” a Fujairah-based fuel oil trader said March 21. Khor Fakkan in the UAE’s Sharjah emirate also supplies bunker fuels to ships.
Some buyers of LSFO bunkers postponed ex-wharf procurements for April deliveries, expecting premiums over FOB Singapore marine fuel with 0.5% sulfur to narrow next month, local bunker suppliers said.
“Even for April’s [term contract] ex-wharf premiums, so far we aren’t expecting much change from the current status,” a trader said, adding that plentiful LSFO supplies will likely push premiums over Singapore to narrow in the next few weeks.
Platts Fujairah-delivered marine fuel with 0.5% sulfur premiums over the benchmark FOB Singapore marine fuel 0.5% sulfur cargo assessments averaged $8.13/mt over March 1-21, down from $14.11/mt for whole of February, data by S&P Global Commodity Insights showed.
“Demand is depressed,” a Fujairah-based bunker supplier said.
HSFO demand had been previously supported, but even that demand has slowed in recent days, traders said. Refueling of HSFO is available within seven to eight days, while next-day deliveries were available since March 20, local bunker suppliers said.
“Market is too oversupplied, demand is not increasing [quickly] enough either,” a second trader said.
The Platts Fujairah-delivered 380 CST high sulfur fuel oil bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo assessments averaged $47.34/mt over March 20-21, little changed from $47.31/mt in the week ended March 17, data by S&P Global showed.
Total oil products stockpiles at Fujairah are now 3.2% higher than at the end of 2022. Heavy distillates are up 13% so far in 2023, light distillates have dropped 2%, while middle distillates have shrunk by 15% over the same period.
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