Fujairah oil product stocks hit near six-month low

Fujairah oil product stocks hit near six-month low
Fujairah oil product stocks hit near six-month low

(WAM / S & P Platts) — Inventories of oil products at Fujairah on the UAE’s East Coast have fallen to their lowest in almost six months, led by the biggest drop in heavy distillates in almost two years as bunker fuel prices flipped to a premium over Singapore.

Total stockpiles stood at 21.422 million barrels as of 21st September, down 7.8 per cent week on week and the lowest since 23rd March 23, data shared today by the Fujairah Oil Industry Zone, FOIZ, showed. Inventories of heavy distillates, which include marine bunkers and power fuel, tumbled 20 per cent, the biggest drop since 26th November, 2018, to 10.058 million barrels, the lowest since 19th August, 2019. S&P Global Platts obtains the inventory data exclusively.

Fujairah 0.5 per cent sulphur bunker fuel was at a premium to Singapore on 21st September for the first time since 26th May, with the assessment at US $333/mt against US $329/mt in Singapore, according to Platts data. Demand for bunker fuel from oil tankers may be getting a boost from increased crude availability while the list of suppliers in Fujairah has shrunk, according to Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai.

“The UAE was exporting more crude than they usually do and this is the time of year when crude demand is usually higher in preparation for winter heating oil demand,” Mali said. “Two suppliers left the Fujairah bunker market, which has reduced the competition.”

Ships needing prompt spot bunker fuel from Fujairah will likely pay a premium until the end of September, because of tight availability of barges until then, sources told Platts previously. Fuel oil exports from Fujairah last week averaged 215,000 b/d, with shipments to Malaysia, Pakistan and Sudan, according to data analytics firm Kpler.

Heavy distillates stocks are now lower than at the end of 2019, while middle distillates such as jet fuel and diesel are 26 per cent higher and light distillates such as gasoline are naphtha have ballooned 40 per cent so far.

Stockpiles of middle distillates jumped 24 per cent in the latest week to 4.706 million barrels, the highest since 22nd June. Stocks of light distillates slipped 3 per cent to 6.658 million barrels.