Oil product stockpiles at the Port of Fujairah on the UAE’s east coast climbed to a two-week high as middle distillates rebounded 36% after a slowdown in exports.
The total inventory was 16.318 million barrels on Oct. 18, up 4% from a week earlier, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Platts on Oct. 20. Middle distillates jumped 36% to 3.529 million barrels, the biggest increase since November 2019 after hitting an 18-month low a week earlier.
Some 160,000 barrels of middle distillates were set to be shipped from Fujairah in the week started Oct. 11, a six-week low, according to commodity data company Kpler. Yemen has been a regular destination for gasoil in recent weeks, while east Africa’s Seychelles was set to get 60,000 barrels of jet fuel, the first such shipment since July.
Heavy distillates used for power generation and marine bunkers climbed 9.4% to 7.751 million barrels, a two-week high.
Demand for HSFO for power generation is slowing as temperatures have begun to ease, curbing the need for air conditioning, a Fujairah trader told Platts.
“Stockpiles of high sulfur fuel oil bunkers have been building,” he said.
Demand for HSFO bunkers is still good, and has shored up premiums over the past two trading days, industry sources said.
According to Platts data, the premium for Fujairah-delivered 380 CST HSFO over 380 CST 3.5% FOB Arab Gulf cargo assessments averaged $24/mt on Oct. 18-19, up from an average of $16.31/mt during the week ended Oct. 15. The average premium was $22.84/mt during the week of Oct. 4-8, the data showed.
Light distillate inventories, including gasoline and naphtha, declined to 5.038 million barrels on Oct. 18, down 16% from a week earlier and the lowest in two weeks.
Gasoline shipments to Iraq have resumed in the past two weeks, with traders set to export 150,000 barrels to the country in the Oct. 11 week after 200,000 barrels a week earlier, the Kpler data showed. Naphtha shipments to Japan have also picked up in recent weeks, with 470,000 barrels headed for Japan from Fujairah in the Oct. 11 week, the most since June 14, according to Kpler.
Total inventories are down 17% from this time last year, led by a 20% decline in both middle distillates and light distillates. Heavy distillates have declined 14% over the same period.
Source: Platts