Fujairah Heavy Distillate Stocks Slide to Two-Month Low as Light and Middle Distillates Rebound
Key Takeaways
- •Total oil product inventories at Fujairah rose 0.8% to 6.412 million barrels in the week ended Aug. 31, the highest level in two weeks.
- •Heavy distillate stocks fell 15% to 3.122 million barrels, a two-month low, after a 32% decline the previous week.
- •Middle distillate stocks rose 19% to 1.741 million barrels, the highest since March 30, while light distillates climbed 25% to 1.549 million barrels, the highest since Aug. 3.
- •A UAE-based trader said spot ship fuel demand is picking up at Fujairah while fuel oil cargo and ex-wharf availability remain limited.
- •Platts assessed the Fujairah-delivered 0.5%S marine fuel bunker premium at $74.96/mt and the 380 CST HSFO bunker premium at $117.99/mt on Sept. 1, down 4.5% and 8.3% respectively week over week.
Oil product inventories at Fujairah in the UAE climbed 0.8% in the week ended Aug. 31, as gains in light and middle distillates offset another decline in heavy distillates used as fuel oil for shipping and power generation, according to Fujairah Oil Industry Zone data published Sept. 2.
Total oil product inventories rose to 6.412 million barrels, a two-week high, according to FOIZ data, which has been compiled by Platts, part of S&P Global Energy, since 2017. Fujairah, located outside the Strait of Hormuz on the UAE's east coast, is one of the world's largest bunkering hubs and a key storage and supply point for shipping fuel in the Middle East, which is why its weekly stock levels are closely watched as an indicator of regional refining flows and marine fuel market conditions.
Heavy distillate stocks fell 15% to 3.122 million barrels, a two-month low, following a 32% slump in the week ended Aug. 24, the data showed.
Middle distillate stocks, such as jet fuel and diesel, rose 19% week over week to 1.741 million barrels, the highest level since March 30. Light distillate stocks, including gasoline and naphtha, climbed 25% to 1.549 million barrels, the highest since Aug. 3.
On the demand side, ship fuel demand in the spot market is picking up at Fujairah, a UAE-based trader told Platts. Fuel oil cargo availabilities are limited, as are ex-wharf offers, the trader said. The back-to-back draws in heavy distillates alongside tightening cargo availability point to a market where bunker suppliers are working through stored fuel rather than replenishing it, a dynamic traders typically track through weekly FOIZ stock reports and Platts bunker premium assessments.
Platts assessed the Fujairah-delivered 0.5%S marine fuel bunker premium over benchmark FOB Singapore marine fuel 0.5% sulfur cargo values at $74.96/metric ton on Sept. 1, down 4.5% week over week.
Platts also assessed the Fujairah-delivered 380 CST HSFO bunker premium against the 380 CST 3.5%S FOB Arab Gulf fuel oil cargo assessments 8.3% lower week over week, at $117.99/mt on Sept. 1.
Source: Platts
