Oil product stocks drop for first time in three weeks

Stockpiles of oil products at the UAE’s Port of Fujairah declined 8.3% in the week ended July 22, the first drop in three weeks as exports rebounded, according to Fujairah Oil Industry Zone and ship-tracking data.

The total inventories fell to 18.362 million barrels from a five-week high a week earlier, FOIZ data published July 24 showed. Stockpiles have still increased 5.9% since the end of 2023.

All categories showed declines for the week, led by a 15% slump in middle distillates to 2.711 million barrels, the first drop in four weeks. Light distillates fell 8.5% to 6.236 million barrels, the first drop in three weeks, while heavy distillates decreased 5.9% to 9.415 million barrels. They all fell from five-week highs a week earlier.

Product exports from the port averaged 572,000 b/d in the week started July 15, up from 410,000 b/d a week earlier, according to S&P Global Commodities at Sea data.

Exports of fuel oil more than doubled over the same period to 126,000 b/d, with 63,000 b/d going to Oman — the first fuel oil shipment from Fujairah to Oman since 2023, the data showed. The rest went to China. Fujairah fuel oil exports were up from 44,000 b/d a week earlier. Other product exports including gasoline and diesel also rose over the same period, to 446,000 b/d from 366,000 b/d.

Inventories of heavy distillates used for power generation and ship fuel declined with some local ship fuel traders reporting loading delays because of recent choppy seas in the region, leading to higher prices for low sulfur fuel oil. The delays are expected to clear out in the next few days, traders said.

The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over the benchmark FOB Singapore marine fuel 0.5%S cargo averaged $12.28/mt this month through July 23, up from $10.41/mt in June. Platts is part of S&P Global Commodity Insights. The premium was $11.71/mt on July 23, down 4.5% on the day.

Some bunker suppliers have not been able to meet their commitments, sources said. “It’s rare but might happen if their vessel is delayed or some off spec or some component is not available for blending,” a Fujairah-based bunker supplier said.

For the high-sulfur fuel oil, traders reported slowing demand.

The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo averaged $25.19/mt this month through July 23, down from $31.79/mt in June, the data showed. The premium was $20.51/mt on July 23, down 3.4% on the day.

So far since the end of 2023, stockpiles of light distillates have climbed 33%, heavy distillates have dropped 7.1% and middle distillates have risen 8.2%.
Source: Platts