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Fujairah: Oil product stocks fall to near record low after big shipment of diesel

Oil product stockpiles at the UAE’s Port of Fujairah dropped close to the record low as of Jan. 10 after a large shipment of diesel was heading for Jordan.

Total inventories were 15.309 million barrels as of Jan. 10, down 7.3% from a week earlier and the lowest since the record low of 14.998 million barrels was set in September 2021, according to Jan. 12 data from the Fujairah Oil Industry Zone. Middle distillates including diesel and jet fuel led the way, plunging 24% over the same period to 1.246 million barrels, the lowest since December 2017, according to the data that has been provided exclusively to S&P Global Platts since January 2017.

A parcel of some 275,000 barrels of diesel was set to be shipped from Fujairah to Jordan in the week started Jan. 3, according to Kpler data. It’s the first such shipment to the country from Fujairah since at least February 2020 and Vitol made the trade, according to Kpler. Vitol wasn’t immediately available for comment.

Heavy distillates stocks including fuel for power generation and for shipping stood at 9.178 million barrels as of Jan. 10, down 9.3% from a week earlier and the lowest in three weeks.

More HSFO cargoes from Fujairah have been moving to Asia for winter demand for power generation, limiting supplies of both HSFO and LSFO for shipping use at the port, market sources told Platts.

“HSFO ex-wharf loading slots still seem tight. Buyers are struggling to get offers for January loading dates,” a Fujairah-based bunker supplier said.

Amid the tightening HSFO inventories, the premium for FOB Arab Gulf 380 CST to MOPAG 380 CST assessments averaged $26.50/mt on Jan. 10-11, up from an average of $16.20/mt for the week started Jan. 3, Platts data showed. The differential was assessed at $28/mt on Jan. 11, up $3/mt on the day.

Shipments of LSFO cargoes into Fujairah to take advantage of arbitrage opportunities have also declined because prices are higher in Singapore, a bunker supplier said. In addition, recent rainy and windy conditions off Fujairah have limited inflows of replenishment cargoes, the supplier said.

Delivered LSFO in Singapore averaged a premium to Fujairah at $11.43/mt this year through Jan. 11, up 14 cents so far this month, Platts data showed. The outright premium was at $10/mt on Jan. 11, after hitting $20/mt on Dec. 31, 2021 and again on Jan. 4, 2022, the highest since May 11, 2020, the data show.

LSFO suppliers have stretched bunkering lead times due to the waning stockpiles of readily available cargo supplies, traders said.

Light distillates including gasoline and naphtha at Fujairah bucked the trend of shrinking stockpiles and rose to 4.885 million barrels as of Jan. 10, up 2.8% from a week earlier to a three-week high.

Middle distillates have dropped the most over the past year, falling 72% since January 2021. Total inventories have slumped 34% over the same period, with heavy distillates down 21% and light distillates off by 33%.
Source: Platts

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