Oil Product Stockpiles Rebound after Exports Slowdown

Credit: Zbynek Burival/Unsplash
  • Singapore, Russia biggest trading partners in November: Kpler
  • Light distillates stockpiles lead gains for 2022 so far
  • Fujairah LSFO premium widens over FOB Singapore

Fuel oils used for power generation and marine bunkers are counted in the heavy distillates category, which showed a 4.9% drop in the week ended Dec. 5 to 12.56 million barrels, the lowest in six weeks. Supplies of fuel oils have grown 32% since the end of 2021. Russia has increased fuel oil shipments to Fujairah this year, reaching 106,000 b/d in November, only the third month on record when supplies exceeded 100,000 b/d, according to Kpler, reports SP Global.

Plummeting fuel inventories

Fuel inventories declined over the week ended Dec. 5 as bunker demand has recently climbed and congestion at barges refueling terminals eased, traders said. Buyers are keen to fix supply requirements in advance of year-end holidays, when traders are usually off and the market slows, traders added.

Barges filled with low sulfur fuel oil over Dec. 3-4 are available for deliveries in three to four days, market sources said.

“Refueling schedules [for barges] are not tight anymore. Terminal congestions during the last week of November delayed loading operations that tightened barge availability till Dec. 10,” a Fujairah-based bunker supplier said.

“The market is still concerned about the potential for excess supply [of LSFO],” a second bunker supplier said, suggesting that Fujairah’s bunker premiums are still pressured by plentiful stockpiles.

The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the FOB Singapore marine fuel 0.5% sulfur cargo assessments climbed to average $17.44/mt Dec. 1-6, from $10.54/mt for all of November, S&P Global Commodity Insights data showed.

Light distillates such as gasoline and naphtha are up the most this year, at 64%. Russia has been shipping gasoline and naphtha to Fujairah consistently since July, after only sporadic cargoes since at least 2017, according to Kpler. Stockpiles of light distillates rose 1.5% in the week ended Dec. 5 to 7.133 million barrels, a two-week high.

Middle distillates such as jet fuel and diesel rose 6.3% to 3.16 million barrels over the week to Dec. 5, bringing them up 48% since the end of 2021.

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Source: SP Global


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