Oil product stockpiles at the UAE’s Port of Fujairah climbed for the first time in three weeks, reports Platts.
Oil product stockpiles at the UAE’s Port of Fujairah climbed for the first time in three weeks on signs of slowing demand for fuel oils for power generation and marine bunkers.
Lowest since September 2019
The total inventory was 18.462 million barrels as of Sept. 6, up 4.4% from a week earlier when the total was the lowest since September 2019.
The fuel oils, which make up heavy distillates, jumped 5.8% to 8.723 million barrels over the same period, after hitting a five-month low on Aug. 30.
Fuel oil exports
Fuel oil exports from Fujairah slumped to 1.742 million barrels in the week started Aug. 30, the lowest since July 26, with no shipments destined for Singapore for the first time since Jan. 18, according to commodity data company Kpler.
Some 115,000 barrels of middle distillates exports were recorded for the week, the lowest since Feb. 1, with all 115,000 barrels of gasoil headed for Yemen, according to Kpler.
Heavy distillates inventories
Heavy distillates inventories are needed to meet growing demand from the power sector. For Q3, oil burn, which includes crude oil, diesel/gasoil and fuel oil, is expected to rise 36% on the year with volume in August the highest in six years due to heatwaves amid the hottest summer in a decade, according to Platts Analytics.
It noted that Saudi Arabia and Kuwait have ramped up buying HSFO with each seeking three to four additional cargoes for September delivery in addition to the regular term volumes.
Traders said that the volume of inquiries for low sulfur fuel oil bunkers in September has faltered from the more robust demand in August.
“Bunker demand has definitely slipped in the past week,” a Fujairah-based trader said.
Reduced port calls
The trader attributed the weakness to reduced vessel schedules calling at the port between Sept. 1 and Sept. 8.
Premiums for Fujairah-delivered marine fuel 0.5%S over FOB Singapore marine fuel cargo assessments were at $1.50/mt on Sept. 7, down from $3.04/mt a week earlier, Platts data showed.
High sulfur bunker demand
High sulfur marine bunkers remained more in demand, but prices have still weakened from August, traders said.
Premiums of Fujairah-delivered 380 CST HSFO over FOB Arab Gulf 380 CST high sulfur fuel oil cargo assessments averaged $24.19/mt in September to date, down from August’s average of $34.05/mt, Platts data showed.
“The steady demand for Fujairah-delivered 380 CST HSFO bunkers continues to outstrip supply,” a Fujairah-based bunker supplier said.
Supplies of 380 CST HSFO bunkers have remained unchanged since August as replenishment cargoes helped boost inventories, traders said.
According to Kpler, Fujairah Oil Tanker Terminals received a shipment of 471,585 barrels, or 74,265 mt, of HSFO on Sept. 4 from Mina Abdullah in Kuwait.
Middle distillates stocks
Middle distillates stocks at Fujairah were 3.984 million barrels as of Sept. 6, up 8.4% on the week and the first increase in three weeks. Middle distillates include jet fuel, gasoil and diesel.
Light distillates stocks
Light distillates stocks, including gasoline and naphtha, stood at 5.755 million barrels as of Sept. 6, down 0.1% from a week earlier.
Total stockpiles are down 26.5% from a year earlier, led by a 35% drop in heavy distillates. Light distillates have dropped 23.9% in the past year while middle distillates are down by 6%.
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