Stockpiles of oil products at the UAE’s Port of Fujairah dropped to a nine-month low as of July 1, with heavy distillates used for power generation and ship fuel at the lowest in 12 weeks, according to Fujairah Oil Industry Zone data.

Total inventories declined 7.1% on the week to 16.54 million barrels in the week ended July 1, the FOIZ data published July 3 showed. Stockpiles have dropped 4.6% since the end of 2023, marking the second time this year they were down from Dec. 31.

Heavy distillate stocks slipped 5.7% in the latest week to 8.741 million barrels, the lowest since April 8. Demand for low sulfur fuel oil in shipping has picked up in recent days, and high sulfur fuel oil is in limited supply and is expected to remain that way through the peak summer months in the Middle East, several trade sources said. Demand for fuel oil for power generation typically increases in the summer for cooling.

Stocks of light distillates such as gasoline and naphtha at the port declined 14% to 5.14 million barrels, the lowest in six months.

Inventories of middle distillates such as diesel and jet fuel rose 3.1% to 2.659 million barrels, the first increase in four weeks.

Exports of refined products from Fujairah averaged 738,000 b/d in June, close to the three-year high of 868,000 b/d recorded in May, according to S&P Global Commodities at Sea data. Clean products dominated shipments in June, with Malaysia the top destination, followed by China and Singapore, the CAS data showed.

Sri Lanka’s Ceylon Petroleum, Saudi Electricity, ENOC, Reliance Industries and Egyptian General Petroleum were among the buyers of fuel oil in June, when total fuel oil exports from Fujairah were estimated at a record 480,000 b/d, according to Kpler data.

Fuel prices have increased as well. The Platts-assessed Fujairah-delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargo averaged $10.41/mt in June, up from the May average of $10.23/mt, according to S&P Global Commodity Insights data. The Platts-assessed Fujairah-delivered 380 CST HSFO bunker premium over the FO 380 CST 3.5% FOB Arab Gulf cargo rose to $35.88/mt on July 2, the highest since May 31, the data showed.

So far since the end of 2023, stocks of light distillates have climbed 9.7%, heavy distillates have dropped 14% and middle distillates have risen 6.1%.

Source: Platts