Oil Stocks Climb 7% on Week, Capping Record Annual Gain

Credits: Ronan Furuta/Unsplash
  • Total rises 29% for year
  • Light distillates lead gains for year
  • Heavy distillates drop 3.3% on week

Oil product stockpiles at the UAE’s Port of Fujairah rose 7.1% in the week ended Dec. 26, capping a record annual gain, according to Fujairah Oil Industry Zone data published Dec. 28, reports Platts.

Total inventories were 20.669 million barrels as of Dec. 26, the highest in two weeks, the FOIZ data provided exclusively to S&P Global Commodities Insights showed.

The total was up 29% since the end of 2021, the biggest annual gain on record since FOIZ began providing the data to S&P Global in January 2017.

Heavy distillates at 6-month low

Gains for the week ended Dec. 26 included an 18% jump for light distillates, which comprises gasoline and naphtha, to 7.467 million barrels and a 25% increase for middle distillates such as jet fuel and diesel to 3.089 million barrels. Both were at two-week highs, after plunging 18% and 35%, respectively, in the prior week ended Dec. 19.

Heavy distillates used as fuel for marine bunkers and power generation dropped 3.3% over the week ended Dec. 26 to 10.113 million barrels, the lowest since June 13.

Barges have been refueling their tanks for shipping fuel, contributing to the drop in heavy distillates stocks, market sources said. Stockpiles may keep falling as bunker inquiries have increased for deliveries for late December and early January, traders said.

The barge refueling is also expected to continue in the coming days as suppliers want to clear a backlog of orders accumulated over the past few weeks for deliveries for the rest of December, local bunker suppliers said, noting steady demand and supply of LSFO.

Bunker premiums

The Fujairah-delivered marine fuel 0.5%S bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values slipped $6.50/mt on the day to $37.94/mt on Dec. 27, averaging $35.15/mt over Dec. 1-27, up from $10.54/mt in all of November, according to data by S&P Global.

As shortages of the heavy distillate-rich Dar Blend crude at local refineries led suppliers to postpone LSFO ex-wharf loadings, bunker premiums were lifted, local sources said. Dar Blend is one of the crude grades procured as feedstock by refiners in Fujairah for LSFO production, according to market sources.

According to data by Kpler shipping data, there have been only two cargo arrivals since the beginning of December. They were two replenishment LR2-sized shipments, with each comprising 599,400 barrels of Dar Blend crude from Sudan discharged in Fujairah’s terminals on Dec. 17 and Dec. 21.

As of Dec. 27, LSFO delivery lead times were between five and nine days, down from 11-14 days earlier in December, local bunker suppliers said. Heavy rain and wind over Dec. 26-27 intermittently disrupted bunker supply, they added.

Light distillates stockpiles led the gains for the year, up 72% followed by a 45% jump for middle distillates and a 6.3% increase for heavy distillates. The biggest annual gain for light distillates was in 2018 when they doubled, while the record jump for middle distillates was in 2019 when they more than doubled. The record yearly gain for heavy distillates was 62% in 2019.

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Source: Platts


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