Marine fuel supplies seen ample
Total inventories down 9.9% from a year earlier
Dated Brent hits new 7-year high
Oil product inventories at the UAE’s Port of Fujairah climbed to an 11-week high with gains registered across all categories with buyers of marine bunker fuels holding back due to rising crude oil prices.
Not registered?
Receive daily email alerts, subscriber notes & personalize your experience.
Total stockpiles stood at 19.601 million barrels as of Jan. 31, up 16% from a week earlier and the most since Nov. 15, according to data from the Fujairah Oil Industry Zone shared exclusively with S&P Global Platts on Feb. 2. Gasoline, naphtha and other light distillates led the gains, rising almost 20% to 6.362 million barrels, the most in six months.
Heavy distillates and residues used for shipping and power generation jumped 16% to 11.379 million barrels, a nine-week high, while middle distillates used for jet fuel and diesel climbed 3.6% to 1.86 million barrels, the most in two weeks.
Rising crude oil prices have led some buyers of marine bunker fuels to stay on the sidelines, though overall demand for both low and higher sulfur fuel oil bunker grades is good, market sources told Platts. Oil prices hit seven-year highs in recent days over the ratcheting tensions between the West and Russia over Ukraine. Platts assessed Dated Brent at $93.265/b on Feb. 1, the highest since Oct. 1, 2014, with traders citing a tight market in the Mediterranean and few alternatives to Russian Urals crude available. OPEC+ ministers meet Feb. 2 to decide March output levels.
Increased stockpiles of HSFO led suppliers to be more competitive, offering cheaper rates for Fujairah-delivered 380 CST HSFO and providing supplies within two to five days, a relatively fast turnaround, according to traders.
Fujairah-delivered 380 CST HSFO premiums against the FO 380 CST 3.5% FOB Arab Gulf cargo assessments averaged $31.07/mt during the week ended Jan. 28, down from $38.02/mt during the week ended Jan. 21, Platts data showed. The premium was last assessed at $28/mt Jan. 31, down $1.30/mt from Jan. 28.
“All bunker grades are now available for prompt delivery as supplies are ample. [Delivered] HSFO prices are even going for much lower for further dates,” a Fujairah-based bunker supplier said.
Even though supplies are building recently, total inventories dropped 9.9% from this time last year. Middle distillates declined 59% over the same period while light distillates are off by 12%. Heavy distillates are up 14% in the past year.
