Fujairah oil product stockpiles little changed

Media IN Fujairah, 15th May, 2019 (WAM

Oil product inventories at the UAE’s East Coast Port of Fujairah were little changed in the week ending 13th May, after nearby incidents of sabotage of vessels and volatility in crude prices kept buyers at bay, according to data released Wednesday by the Fujairah Oil Industry Zone, FOIZ.

Stockpiles rose 0.5 per cent over the week to 23.832 million barrels, the smallest percentage change since 11th March. Inventories of marine fuels and other heavy distillates and residues climbed 7 per cent to 11.091 million barrels after falling to a five-week low in the previous week.

A Fujairah port source said port operations were “business as usual.”

Uniper Energy DMCC, which operates one of two refineries at Fujairah, has about 1 million mt of storage capacity for oil products across three terminals at the port, with a stockpile of about 300,000 mt of low sulphur fuel oil, LSFO, Chris Wood, managing director of Uniper Energy, said.

The company, part of Germany’s Uniper, is currently shipping 154,411 mt of LSFO from Fujairah to Singapore, with delivery set for Thursday 16th May. The largest-ever shipment of LSFO, it was loaded between 1-4 May, and did not affect Fujairah’s total inventories because the product was directly loaded after refining, with minimal storage involved, Wood said.

Upstream crude prices were volatile last week amid global supply tightness and increased trade tensions between the US and China, trade sources in Singapore and Fujairah told S&P Global Platts.

The front-month July Brent futures fell 1.9 per cent on 7th May and rose 1.1 per cent the next day. The spread between the front-month and second-month ICE Brent Futures contracts surged last week above the US $1/b mark for the first time in nearly six years.

The market structure for July and August ICE Brent Futures contracts settled at a steep backwardation of US $1.02/b as of 4:30 pm Singapore time (0830 GMT) on Monday. The spread was last higher on 17th September, 2013, according to data compiled by Platts.

The volatility was also evident in Fujairah bunker prices. Last Wednesday, Fujairah-delivered 380 CST bunker fuel fell US $7.10/mt on day. On Friday, it jumped US $4.40/mt on the day to US $424.15/mt, according to data from the Platts Market on Close assessment process.

Light distillate product inventories fell 3 per cent over the past week to 10.46 million barrels, a two-month low, while middle distillates declined 12 per cent to 2.281 million barrels, according to the FOIZ data.