Inventories of oil products at Fujairah on the UAE’s East Coast have fallen to their lowest in almost six months, led by the biggest drop in heavy distillates in almost two years as bunker fuel prices flipped to a premium over Singapore.
Total stockpiles stood at 21.422 million barrels as of Sept. 21, down 7.8% week on week and the lowest since March 23, data shared on Sept. 23 by the Fujairah Oil Industry Zone showed. Inventories of heavy distillates, which include marine bunkers and power fuel, tumbled 20%, the biggest drop since Nov. 26, 2018, to 10.058 million barrels, the lowest since Aug. 19, 2019. S&P Global Platts obtains the inventory data exclusively.
Fujairah 0.5%S sulfur bunker fuel was at a premium to Singapore on Sept. 21 for the first time since May 26, with the assessment at $333/mt against $329/mt in Singapore, according to Platts data. Demand for bunker fuel from oil tankers may be getting a boost from increased crude availability while the list of suppliers in Fujairah has shrunk, according to Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai.
“The UAE was exporting more crude than they usually do and this is the time of year when crude demand is usually higher in preparation for winter heating oil demand,” Mali said. “Two suppliers left the Fujairah bunker market, which has reduced the competition.”
Ships needing prompt spot bunker fuel from Fujairah will likely pay a premium until the end of September, because of tight availability of barges until then, sources told Platts previously. Fuel oil exports from Fujairah last week averaged 215,000 b/d, with shipments to Malaysia, Pakistan and Sudan, according to data analytics firm Kpler.
Heavy distillates stocks are now lower than at the end of 2019, while middle distillates such as jet fuel and diesel are 26% higher and light distillates such as gasoline are naphtha have ballooned 40% so far.
Stockpiles of middle distillates jumped 24% in the latest week to 4.706 million barrels, the highest since June 22. Stocks of light distillates slipped 3% to 6.658 million barrels.