Oil product stocks climb as Al-Zour refinery raises production

Stockpiles of oil products at the UAE’s Port of Fujairah rose 5.9% in the week ended Feb. 5 after the first fuel oil import from Kuwait in 2024, according to the Fujairah Oil Industry Zone and shipping data.

The total rose to 18.755 million barrels as of Feb. 5, up from a five-week low a week earlier, the FOIZ data published Feb. 7 showed. Stockpiles have climbed 8.2% since the end of 2023.

Heavy distillates used as fuel oil for power generation and for shipping climbed 7.9% to 9.59 million barrels, also a five-week high. Light distillates such as gasoline and naphtha fell 0.5% to 6.626 million barrels, a three-week low. Middle distillates jumped 18% to 2.539 million barrels, the highest in two weeks. So far since the end of 2023, stocks of light distillates have climbed 41% after a 55% surge in the first week, middle distillates have increased 1.3% and heavy distillates have declined 5.4%.

Incoming fuel oil from Kuwait to Fujairah for the week started Jan. 29 was estimated at 860,000 barrels, the first such shipment since November, according to Kpler data.

Production from Kuwait’s Al-Zour refinery, a major fuel oil supplier, has climbed rapidly in recent weeks, reaching full capacity of 615,000 b/d for the first time on Feb. 4, according to the company.

Kuwait Petroleum Corp. sold 130,000 mt of 0.5% sulfur fuel oil to Phillips 66 for loading over Feb. 13-14, with Fujairah or Singapore the likely destination, S&P Global reported Feb. 2, citing trade sources.

A similar low sulfur fuel oil cargo of about 130,000 mt arrived in Fujairah from Al-Zour refinery about a week ago as part of the first tender by Al-Zour in about four months, industry sources said.

Fujairah winds

High winds at the port since Feb. 2 have also disrupted refueling operations, contributing to the buildup in heavy distillates stockpiles, traders said. Although some suppliers of LSFO are “slowly restarting” bunkering since Feb. 5, others have postponed offers to the week starting Feb. 12, suppliers said.

Some shipowners have also pushed back their LSFO orders because of the bad weather, traders said.

The Platts-assessed Fujairah-delivered marine fuel 0.5% bunker premiums over the benchmark FOB Singapore marine fuel 0.5% cargo values fell to average $16.10/mt Feb. 1-6 from $18.35/mt across January, S&P Global data showed.

High sulfur fuel oil orders were also delayed because of the bad weather, with lead times extended to up to 11 days, from typically one to three days ahead, traders said.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo averaged $23.83/mt Feb. 1-6, well above the $8.74/mt for all of January, according to S&P Global data.

Overall product imports into Fujairah climbed to 5.25 million barrels in the week started Jan. 29, the highest since Dec. 25, Kpler data showed. Product exports came to 6.8 million barrels, the highest since July 2023.
Source: Platts