Stockpiles of oil products at the UAE’s Port of Fujairah plummeted 21% in the week ended Sept. 23 to a 2 1/2-year low with all categories showing double-digit declines, according to Fujairah Oil Industry Zone data published Sept. 25.
The total fell to 14.365 million barrels, the lowest since the record low of 14.266 million barrels on Feb. 14, 2022, according to the FOIZ data compiled by S&P Global Commodity Insights. Stockpiles have now shrunk 17% since the end of 2023.
Stockpiles of heavy distillates and residues used for power generation and ship fuel dropped 12% to 8.461 million barrels, a three-week low while light distillates such as gasoline and naphtha declined 16% to 4.675 million barrels, a 10-month low. Middle distillates such as diesel and jet fuel dropped 51% over the same period to 1.5 million barrels, the lowest in six months.
Stockpiles may continue to drop with some 50,900 barrels of gasoline and 77,400 barrels of fuel oils headed to Saudi Arabia in the week started Sept. 23, according to Kpler data. They mark the fourth consecutive week of incoming gasoline for Saudi Arabia from Fujairah and the biggest fuel oil total since May. However, product exports for September are averaging 555,555 b/d, down from 724,000 b/d in August, according to the data.
In addition, jet fuel demand is picking up in the region from the ongoing Israel-Hamas war in Gaza and intensified military exchanges with Hezbollah in Lebanon, according to a spokesperson for Kuwait Integrated Petroleum Industries (KIPIC), the subsidiary of Kuwait Petroleum which owns the 615,000 b/d Al-Zour refinery. At the same time, the ultra-low sulfur diesel market is “saturated”, the person said.
The ship fuel market faces “mediocre” demand and plenty of supply, traders said.
For LSFO, the Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo fell to an average of $14.54 per metric ton this month through Sept. 24 from $14.74/t in August, Commodity Insights data showed. It was even lower on Sept. 24 at $9.70/mt.
For HSFO, the Platts-assessed Fujairah-delivered 380 CST bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo rose to an average of $53.27/t this month through Sept. 24 from $24.31/t in August, according to the Commodity Insights data. It was $45.10/mt on Sept. 24.
So far since the end of 2023, stocks of middle distillates have slumped 40%, heavy distillates have dropped 17% and light distillates are little changed.
Source: Platts
