Oil product stocks fall led by slump in heavy distillates, according to Fujairah data
Oil product stockpiles at the UAE’s Port of Fujairah retreated to a five-week low as heavy distillates slumped the most in more than three years, according to recent data from the Fujairah Oil Industry Zone.
Total inventories stood at 15.77 million barrels as of December, down 12.9 percent from a week earlier and the lowest since November 1, the data showed. Heavy distillates used for marine bunkers and power generation dropped 24 percent over the same period, the biggest drop since February 2018, according to the data. Heavy distillates stocks dropped to 9.025 million barrels, which is the lowest since November 1.
Shipping demand for bunker fuels has increased, especially for the low sulphur variety, while costs are going up, traders said. Demand is especially acute for immediate supplies, limiting the availability of barges and that tightness is expected to last until mid-December, industry sources said.
One trader noted rising costs and reduced supplies of blending components used to produce low sulphur fuel oil.
“This has pushed up both the premiums of ex-wharf cargoes and delivered marine fuel 0.5 percent,” a Fujairah-based bunker supplier said. Premiums of Fujairah-delivered marine fuel 0.5 percent against the benchmark Singapore marine fuel 0.5 percent cargo assessments averaged $16.95/mt this month through December up from November’s average of $16.56/mt, the data showed.
The trader wouldn’t say which blending components were in short supply.
In Singapore, LSFO is produced using vacuum gasoil, fuel oil from Brazil, or low sulphur Skikda barrels from Algeria. Despite the drop in inventories, bunker fuel supplies are considered sufficient, traders said. Supplies of high sulphur fuel oil have remained stable, they added.
Middle distillates jumped 25 percent week on week to 2.348 million barrels as of December 6, a two-week high, according to the FOIZ data. Light distillates advanced 2.1 percent to 4.397 million barrels, a three-week high.
Total inventories are down 23.4 percent since this time last year, with middle distillates dropping 56.32 percent. Light distillates have slipped 33.39 percent over the same period while heavy distillates are up 4.76 percent.
For more information visit www.fujairahport.ae
4th January 2022