FUJAIRAH, 4th December, 2019 (WAM/ S and P Platts) — Bunker fuel and other heavy distillate stocks dropped the most in a year over the past week at Fujairah in the UAE on speculation that supplies of high sulphur products are being reduced ahead of the International Maritime Organisation’s 2020 mandate, data released Wednesday by the Fujairah Oil Industry Zone, FOIZ, showed.
Inventories of heavy distillates and residues, including fuel oils used for marine bunkers and power generation, fell 17 percent during the period from 25th November to 2nd December.
The 17 percent drop was the biggest since 26th November, 2018, data compiled by S and P Global Platts showed. Stocks as of Monday stood at 12.786 million barrels, double the level seen at the end of last year. The 0.5 percent sulphur IMO marine fuel cap takes effect on 1st January, 2020.
“One of the reasons for the stockpiles to go down would be that suppliers and storage facilities have now stopped procuring/importing those products which will become redundant for marine fuel use from January 1, 2020,” said Apurva Mali, sales manager at Masc Co DMCC, a broker in bunker fuels in Dubai.
“We’re nearly there with the deadline almost three weeks away. Any and all buyers of marine fuel at this stage would only buy compliant fuel. They need to have their tanks flushed with compliant fuel for at least one refuelling so the mixing does not result in higher sulphur content from January 1, 2020.”
A source in Fujairah, however, said traders moved supplies of high sulphur fuel oil to Asia to reduce HSFO inventories in Fujairah.
Total stocks including heavy, middle and light distillates on December 2 stood at an eight-week low of 20.817 million barrels, down 11 percent for the week.
Light distillates, including gasoline, dropped 5 percent to 4.658 million barrels, the lowest since 11th December, 2017. Light distillates is the only category where inventories are lower for the year, down 52 percent.
Meanwhile, inventories of middle distillates, such as gasoil, diesel, marine gasoil, jet fuel and kerosene, climbed 12 percent to a two-week high of 3.373 million barrels. The stockpiles have also doubled this year.
Platts is the official publisher of the oil product data. Fujairah has the Middle East’s largest commercial storage capacity for refined products.
Source: Emirates News Agency