Fujairah data: Refined oil product inventories slip on fall in heavy residues

Inventories of refined oil products at the Fujairah hub dropped for the first time in three weeks, as supplies of heavy residues fell from a six-month high, according to data released Wednesday and exclusively provided by the Port of Fujairah to S&P Global Platts.

Total stockpiles of refined oil products stood at 21.547 million barrels as of Monday, down 2.3% on the week, and the biggest percentage decline since the week-ended February 11.

Heavy residues, including marine bunker fuels, fell 12% — the largest fall since the week-ended November 26 — to 8.577 million barrels, after climbing to a six-month high a week earlier.

The Fujairah bunker market saw a slight uptick in demand in recent days compared with the first half of February, when trading is traditionally slow, market sources said.

The decline in Fujairah heavy residues probably does not indicate a shift from what has been a well-supplied market since the beginning of the year, said Alex Yap, senior analyst at Platts, in Singapore. The total at 8.57 million barrels is about 30% higher than levels towards the end of last year, he said. It’s too soon for refineries to start cutting supplies ahead of next year’s International Maritime Organization 2020 rules mandating lower sulfur bunker fuel, Yap added.

Underscoring the plentiful supplies, Fujairah bunker premiums in February fell as much as 50% from January, Platts data showed. More barrels from Iran are flowing into the Fujairah bunker market, and Iraq has increased its supply, sources said.

Light distillate stockpiles rose 5.1% for the week to 10.99 million barrels and middle distillates climbed 9.3% to 1.98 million barrels.

For the year, total Fujairah stockpiles were up 24%, led by a 38% gain in heavy residues. Middle distillates were 35% higher and light distillates rose 14%.

Platts holds exclusive rights to publish Fujairah oil inventory data, and has deployed a blockchain network for its collation.
Source: Platts