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FUJAIRAH DATA: Oil product stocks on rebound as fuel oil exports slow

Oil product stockpiles at the UAE’s Port of Fujairah climbed for the first time in three weeks, led by an 11% jump in fuels used for shipping and power generation, in the week ended Aug. 29, according to Fujairah Oil Industry Zone data.

The total inventory was 21.972 million barrels as of Aug. 29, up 0.8% from a week earlier after dropping 9.6% the previous two weeks, the port data provided exclusively to S&P Global Commodity Insights on Aug. 31 showed. Inventories were 20.21% higher on the year.

Stocks of heavy distillates and residues used as fuels for power generation and marine bunkers stood at 11.675 million barrels, climbing for the first time in three weeks and the highest in two weeks. Heavy distillates were 34.4% higher than a year earlier.

Fuel oil exports slowed to just 811,000 barrels in the week started Aug. 22, down from 4.076 million barrels a week earlier and the lowest since February, according to preliminary Kpler data. Shipments for the latest week were destined for Saudi Arabia, a regular destination for fuel oil from Fujairah, and Australia, the first such trade on record, the data showed. Trading activity for bunkers in the Port of Fujairah was expected to gain momentum in September as low prices attract some buyers, S&P Global previously reported.

The price of marine fuel with 0.5% sulfur delivered in Fujairah has dropped from a record $1,140/mt on July 5 to $795/mt as of Aug. 30, little changed since Aug. 8, according to assessments by Platts, part of S&P Global.

Ample LSFO
Amid ample low sulfur fuel oil supplies and lackluster bunker demand at Fujairah, suppliers will be making more aggressive offers for early September deliveries while bids are also competitive, market sources said.

Market participants said they expect LSFO bunker demand to pick up in September following weather-induced operational bottlenecks that lifted delivered premiums significantly and dampened demand for most of August.

“LSFO demand is not great and prices have generally been too high, even compared to Singapore,” a Fujairah-based bunker supplier said.

The Platts Fujairah-delivered marine fuel 0.5%S bunker price spread against Singapore rose to average $52.48/mt Aug. 1-30 from minus $1.60/mt in July, and most recently peaked at $98/mt Aug. 4 to breach all-time highs since Platts started assessing delivered marine fuel 0.5%S at both ports on July 1, 2019, S&P Global data showed.

The Platts Fujairah-delivered marine fuel 0.5%S bunker premium over the FOB Singapore Marine Fuel 0.5%S cargo assessment softened to average $52.96/mt Aug. 29-30 from $69.73/mt over the week ended Aug. 26, according to data.

High sulfur fuel oil stockpiles at the port of Fujairah are ample, despite steady volumes of bunker fixtures for early September deliveries against robust demand seen during the same period in August, local traders said

“HSFO demand and supply conditions have been steady so far,” a second Fujairah-based bunker supplier said Aug. 31, indicating that inventories are adequate to meet buyers’ prompt requirements.

Above-average demand pushed the Platts Fujairah-delivered 380 CST HSFO premium against the FO 380 CST 3.5% FOB Arab Gulf cargo assessment to average $43.49/mt Aug. 29-30, up from $37.76/mt the week prior, S&P Global data showed.

Light distillates inventories stood at 7.273 million barrels as of Aug. 29, down 14% from a week earlier and the second weekly decline, according to the port data. Inventories of the products including gasoline and naphtha are up 29.16% in the past year.

Middle distillates inventories climbed 8% over the week ended Aug. 29 to 3.024 million barrels, the highest in three weeks, the port data showed. The stockpiles, which include jet fuel and gasoil, are down 23.63% in the past year.
Source: Platts

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