Fujairah’s Feb bunker premium drops over 30% on month on ample supply

Fujairah bunker premiums in February fell more than 30% month on month amid ample supply, according to S&P Global Platts data and industry sources.

Spot ex-wharf 380 CST bunker fuel premiums over Mean of Platts Arab Gulf 180 CST assessments averaged $3/mt in February, coming off from an average of $6/mt in January, Platts data showed.

Spot delivered 380 CST bunker fuel premiums over MOPAG 180 CST averaged $11/mt in February, softening from an average of $17/mt in January, the data showed.

“The market has been quite well supplied since the start of this year,” a bunker trader in Fujairah said.

“Ex-wharf premiums have come off to low single digits [over MOPAG 180 CST] now, from higher single digits at the start of this year and low double digits late last year,” the trader added.

Despite the sanctions on Iran, some barrels from the country continued to flow into the Fujairah bunker market, either via re-exports from different ports or through blending with non-sanctioned supplies, market sources said.

“Iran is increasing [total fuel oil exports] to 1.5 million mt a month, up from 1 million mt [before the sanctions],” a fuel oil trader based in the Middle East said.

Iraq has also increased its supply recently, sources said.

Going into the rest of March, supply was likely to be sufficient to meet bunker demand, sources added.

“Buying requirements look stable for now and there is no problem with availability for prompt dates,” a bunker supplier in Fujairah said.

Stocks of heavy residues jumped 19.2% to 9.792 million barrels in the week to February 25, marking a six-month high, according to latest date from the Fujairah Energy Data Committee.

Meanwhile, fuel oil demand for air-conditioning has yet to pick up in the Middle East, according to sources.

Middle Eastern countries are likely to start buying more fuel oil from April, which typically sees stronger seasonal demand owing to summer.
Source: Platts