Oil product stockpiles at the UAE’s Port of Fujairah rose 1.6% in the week ended Jan. 16, with gasoline and other light distillates reaching a four-month high, according to Fujairah Oil Industry Zone data published Jan. 18.
The total was 20.156 million barrels as of Jan. 16, the highest in five weeks, according to the data provided exclusively to S&P Global Commodity Insights.
Light distillates stocks increased 12% over the week to 7.883 million barrels, the highest since Aug. 21. Middle distillates including jet fuel and diesel expanded 20% to 3.308 million barrels, a five-week high.
Heavy distillates used as fuel oil for power generation and marine bunkers was the only category to show a drop, falling 11% in the week to 8.965 million barrels, the lowest since June. Heavy distillates have been at or close to a six-month low since late-December and are down 11% this year while light distillates and middle distillates are up so far in 2023.
Fuel oil imports into Fujairah dropped in the week started Jan. 9 to 1.48 million barrels, the lowest since October, according to Kpler shipping data. Russia, which had doubled its fuel oil shipments to Fujairah in 2022, accounted for the bulk of the imports in the Jan. 9 week, after shipments had slowed for most of December. Fuel oil imports from Kuwait have halted this year after doubling in 2022, according to Kpler shipping data.
There are also signs of slowing demand for marine bunkers at Fujairah. The Platts-assessed premium for Fujairah-delivered marine fuel with 0.5% sulfur over FOB Singapore cargo values fell to $19.42/mt on Jan. 17, the lowest since Dec. 5, according to S&P Global data. It’s tumbled 49% this year.
Sellers of low-sulfur fuel oil have been lowering prices to spur demand, and this is expected to continue for now, Fujairah-based traders said. Bunker barges are open for prompt refueling as well, with Fujairah’s oil terminals less congested than in December and earlier this month, traders said.
“Barge schedules seemed back to normal now, following a period of tight availability for prompt slots,” a Fujairah-based bunker supplier said. Not everybody says demand is slow, however. “Demand is somewhat normal. Supply [of LSFO] is perhaps slightly down and tighter for balance-January,” another bunker supplier said.
Sellers of high sulfur fuel oil bunker fuel have also been more active, traders said. The drop in inventories has caused some HSFO suppliers to delay deliveries, according to market sources.
“There are delays on [HSFO] ex-wharf cargo loadings, we are seeing better availability for LSFO,” a bunker supplier 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 climbed to average at $46.73/mt Jan. 3-17 from $35.66/mt across December, and was $50.93/mt on Jan. 17, S&P Global data showed.