FUJAIRAH DATA: Petroleum product inventories hit 4-week high amid slowing demand for LSFO vessels
Fujairah bunker prices down 37% since July 5
Total inventories up 27% year-on-year
Only stocks of middle distillates down year on year
Stockpiles of petroleum products at the port of Fujairah in the United Arab Emirates hit a four-week high on September 12 on gains in fuels used for power generation and transportation amid slowing maritime demand for low sulfur grades, according to published data from the Fujairah Petroleum Industry Zone. September 14.
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Total inventories were 23.450 million barrels as of September 12, up 7.9% from the previous week and the highest since August 16, according to FOIZ data provided exclusively to S&P Global Commodities Insights. All three product categories for light, medium and heavy distillates posted gains for the week.
Stocks of light distillates such as gasoline and naphtha rose 4.1% during the week to 7.361 million barrels – a three-week high – and middle distillates such as jet fuel and kerosene rose. rose 0.8% to 2.693 million barrels – a two-week high.
Inventories were now 27% higher than a year earlier, driven by a 53.57% increase in heavy distillates. Stocks of light distillates increased by 27.9% over the same period and middle distillates fell by 32.4%.
Stocks of heavy distillates and residues used as fuel for power generation and marine bunkers jumped 12% on the week to 13.396 million barrels, the highest since June 7, 2021. Marine fuel at 0, 5% sulfur delivered to Fujairah has fallen 37% since July 5 to $717/tonne as of September 13, after falling to $660/tonne on September 8, the lowest since January 25, according to S&P data Overall.
According to local traders, weak demand for low-sulphur bunker oil has mainly contributed to the increase in inventories.
“As far as inquiries go, the market is pretty quiet [during the week started Sept. 12] even more compared to the previous week,” a Fujairah-based trader said on September 14.
Amid high LSFO inventories, shipments of Fujairah ex-dock marine fuel at 0.5% S for futures supply in September were concluded at premiums of around $23-$37/mt to benchmark FOB Singapore marine fuel cargo values at 0.5% S, softening from the $40-$60/tonne concluded earlier for August parcels, traders said.
Recently, September loading futures ex-dock shipments were made at premiums of $23-27/tonne as upstream suppliers more competitively offered to reduce inventory, traders said.
“Proposed levels [for LSFO bunkers] are everywhere with very few inquiries. Few rods could be repaired,” said a Fujairah-based bunker supplier. Most barges cannot refuel quickly enough due to congestion at terminals, a market source said.
Weak demand has led to tighter 0.5%S marine fuel bunker premiums delivered by Platts Fujairah compared to FOB Singapore 0.5%S marine fuel cargo valuations averaging 40.85 $/ton from Sept. 12-13, down from $41.02/ton the previous week, according to S&P Global Data.
HSFO demand, on the other hand, was above average, traders said.
“Barging slots are tight until September 25, buyers are struggling to get offers,” one trader said. “The berths are busy due to traffic jams…There is also limited barge capacity and few players for HSFO.”
Fuel oil exports from Fujairah were only slightly lower in the week starting September 5 at 3.8 million barrels from 4.1 million barrels a week earlier, according to Kpler data. Saudi Arabia, which has sourced fuel oils from Fujairah for power generation amid hot weather demand for air conditioning, has not been a destination country for fuel oils from Fujairah since the week of Aug. 22, according to the data.