Oil product stockpiles at the UAE’s Port of Fujairah climbed to a two-week high, the first gain in three weeks, led by increases in fuels for marine bunkers and power generation.
The total inventory on Aug. 9 was 19.349 million barrels, up 2.2% from a week earlier and the most since July 26, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Platts on Aug. 11.
Heavy distillates, which include fuel for power generation and marine bunkers, climbed 5.2% to 10.85 million barrels as of Aug. 9, after hitting a three-month low on Aug. 2.
The Fujairah bunker market has seen low demand while spot market trading activity in the key bunkering hub of Singapore is “healthy,” Platts previously reported. Fujairah-delivered marine fuel 0.5 %S bunker was assessed at $507/mt on Aug. 10, down $15/mt on the day, while Singapore-delivered marine fuel 0.5 %S bunker was assessed at $514.75/mt, down $13.25/mt.
The slowdown in Fujairah may be related to India’s monsoon season when shipments of weather-sensitive dry bulk items such as sugar and cotton can be disrupted, according to Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai. The India Meteorological Department noted in an Aug. 5 note that monsoonal winds in the Arabian Gulf contributed to days of heavy rainfall in Rajasthan and West Madhya Pradesh.
Recent shipping incidents around Fujairah did not have a lasting effect on shipping activity at the port, Mali said.
While bunker fuel demand at the port did immediately plunge after the alleged vessel hijacking in the Gulf of Oman on Aug. 3, the market fully recovered in a few days, industry sources said.
Singapore holiday
“Bunker demand stabilized fairly quickly upon resuming normalcy. However, the lack of trading activity on Aug. 9 due to the absence of Platts pricing during the public holiday in Singapore could have also contributed to an inventory build,” a Fujairah-based bunker trader said.
More importantly, stockpiles probably rose because of port congestion and poor weather that delayed barge loadings, traders said.
“The lead time of bunker delivery has lengthened to approximately seven days, compared to a prompt lead time averaging around two to three days the previous week,” the Fujairah-based bunker trader said.
A second trader said that the demand for the very low sulfur fuel oil bunker grade has been consistent, with premiums of Fujairah-delivered marine fuel 0.5%S lackluster.
According to Platts data on Aug. 10, the premium for Fujairah-delivered marine fuel 0.5%S against FOB Singapore 0.5%S was assessed at 83 cents/mt, down from an average of $1.42/mt during the previous week ended Aug. 6.
Stockpiles of light distillates, including gasoline and naphtha, stood at 5.51 million barrels on Aug. 9, up 0.7% from a week earlier.
Middle distillates, including jet fuel and gasoil, declined 4.7% to 2.989 million barrels, the lowest in two weeks.
Total stockpiles have dropped 22.63% from a year ago, with heavy distillates 23.46% lower, middle distillates off 15.85% and light distillates down 24.34%.
Source: Platts