Stockpiles of oil products at the UAE’s Port of Fujairah dropped for a fifth consecutive week, the longest losing streak since 2020, as shipments of fuel oil used for bunkers and for power generation increased ahead of summer and peak demand for air conditioning in the Middle East, according to the Fujairah Oil Industry Zone and ship tracking data.
Total inventories fell 0.2% to 19.505 million barrels in the week ended May 20, a two-month low, the FOIZ data published May 22 showed. The last time stocks dropped more than five weeks in a row was in October 2020 when they fell for seven weeks in a row. Stockpiles have increased 12% since the end of 2023.
Stocks of heavy distillates used for power generation and ship fuel dropped 7.2% over the week to 9.241 million barrels, a six-week low. Some 1.1 million barrels of fuel oil were heading to Saudi Arabia in the week that began May 13, the most since January, according to Kpler data. The UAE’s ENOC and Saudi Aramco were among the buyers, the data showed.
Demand for low sulfur fuel oil for shipping has declined while more high sulfur fuel oil supplies headed for Fujairah, bunker traders said.
“LSFO demand flows have become less reliable lately,” a Fujairah-based bunker supplier said, citing spotty trading activity over the past couple of weeks.
LSFO bunker premiums have come under pressure while suppliers aggressively tried to generate sales from the limited number of inquiries received, traders said.
“Demand has not been good in May,” one trader said.
The Platts Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo values fell to $8.25/mt on May 20, before recovering slightly to $10.99/mt May 21, S&P Global Commodity Insights data showed.
HSFO supplies have been growing after three Aframax-sized replenishment cargoes from Russia and Iran found homes in Fujairah since mid-May, according to industry sources.
The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo averaged $33.27/mt over May 20-21, down from $41.71/mt in the week ended May 17, according to Commodity Insights data.
For the other product categories, inventories of middle distillates such as diesel and jet fuel expanded 16% over the week to May 20 to 3.705 million barrels, a five-week high, while light distillates rose 2.9% to 6.559 million barrels, the most in two weeks.
So far since the end of 2023, stocks of light distillates have climbed 40%, heavy distillates have dropped 8.9% and middle distillates have risen 49%. Commodity Insights has been reporting weekly stockpiles since 2017.
Source: Hellenic Shipping News
