Stockpiles of oil products at the UAE’s Port of Fujairah jumped 31% in the week ended Feb. 20 with heavy distillates ballooning 51%, the most on record, according to Fujairah Oil Industry Zone data published Feb. 22.
Total inventories were 22.411 million barrels as of Feb. 20, the highest since Dec. 12, the FOIZ data provided exclusively to S&P Global Commodity Insights showed. The increase was the biggest since the week ended Feb. 21, 2022, when the total jumped 34% on the week with heavy distillates up 37%. The FOIZ data provided to S&P Global goes back to January 2017.
Heavy distillates used as fuel for power generation and marine bunkers jumped to 12.314 million barrels as of Feb. 20, the most since Dec. 12. Fuel oils had been at an eight-month low a week earlier on Feb. 13. Platts-assessed marine fuel oil with 0.5% sulfur delivered Fujairah fell 6.6% over the week ended Feb. 20 to $605/mt, according to S&P Global data. By Feb. 21, it was down to $595/mt, the lowest since Jan. 11.
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Fuel oil shipments into Fujairah jumped to 3.2 million barrels in the week started Feb. 13, the most since early October, according to Kpler shipping data. Russia accounted for 1.2 million barrels, the most since mid-November, while imports from Kuwait hit a record 1.03 million barrels, the Kpler data showed.
Kuwait’s new 615,000 b/d Al Zour refinery started in November 2022 was expected to increase demand for storage at Fujairah, especially for fuel oil, analysts have said.
Traders said they were aware of Kuwaiti shipments into Fujairah, which may continue. A record shipment of 404,259 barrels of LSFO from Al-Zour was offloaded at Fujairah port on Feb. 14, according to Kpler.
Kuwait cargoes
“We have heard of a few big parcels originating from Kuwait, which are likely heading to Fujairah for discharge by end of the month,” a Fujairah trader said. LSFO bunker demand slumped in January, he noted, “but we hope for stronger [volumes] in March because prices are lower now.”
Most sellers have plenty of LSFO for deliveries for the rest of February and early March, with stockpiles held by refineries and oil companies at the port, bunker suppliers said.
Lackluster LSFO bunker demand has put pressure on Fujairah premiums over Singapore for prompt deliveries, suppliers also said.
Ample LSFO supplies in the region allowed smaller players at nearby Sharjah port Khor Fakkan to undercut Fujairah traders, market sources said.
Cargoes from Khor Fakkan are “competitive enough to shift volumes” from Fujairah, a bunker trader said.
Platts Fujairah-delivered marine fuel 0.5%S bunker premiums over the benchmark FOB Singapore marine fuel 0.5% sulfur cargo assessments averaged $12.99/mt Feb. 20-21, down from $16.16/mt during the week ended Feb. 17, according to S&P Global data.
More product from Russia since its invasion of Ukraine a year ago also helped boost Fujairah oil product inventories to a two-year high on Nov. 7, according to the FOIZ data compiled by S&P Global.
Middle distillates such as diesel and jet fuel rose by 2% over the week ended Feb. 20 to 1.864 million barrels, a three-week high.
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Light distillates, including gasoline and naphtha, jumped 15% over the same period to 8.233 million barrels, a five-month high.
Total stockpiles are now 8.4% bigger than at the end of 2022, the first time stockpiles are higher than they were at the end of December. Heavy distillates are up 22% so far in 2023, light distillates have expanded 10%, while middle distillates have shrunk by 40%, the FOIZ data compiled by S&P Global showed.
Source: Platts
