Fujairah bunker sales drop 1% in May but stocks also drawn down

London, (Quantum Commodity Intelligence) – Sales of bunker fuels in the Fujairah refuelling and oil storage hub fell 1% in May to 4.2 million barrels, even as stocks in the bunkering hub were also drawn down.

Bunker sales dropped from 4.241 million barrels in April, said data from FEDCom and S&P Global Platts this week, but stocks of residuals in the same hub also fell from 15.075 million barrels as of April 26 to 14.65 million on May 31, showed the latest data release.

Stocks had fallen as low as 11.9 million barrels on week ending May 24.

The stock drawdown came amid 14-month lows for fuel oil cracks which likely caused local refiners to curtail production of the heavy distillate.

Demand for all fuel grades dropped in May in Fujairah, apart from for low-sulfur fuel oil 180 centistoke, which saw sales quadruple, from a low base, to 14,957 barrels.

Sales of 0.5%-sulfur Marine Fuel, the main bunkering grade since IMO 2020 was implemented at the start of last year, fell 0.7% to 3.32 million barrels and HSFO 380cst sales dropped 2.7% to 0.69 million barrels.

Meanwhile, low sulfur marine gasoil demand was 0.16 million barrels, down 2.2% and standard marine gasoil sales fell by nearly a third to 10,592 barrels.

Year-to-date sales of bunker fuels were 20.61 million barrels or an average of 4.12 million barrels per month, or 634,000mt (6.5 density conversion) 

Refining margins for fuel oil slumped across Europe and Asia in May, according to Quantum data, reaching lows not seen since the first quarter of 2020.

The month-ahead swap crack for HSFO 380cst FOB Singapore fell as far as -$10.89/b on May 18 before recovering to -$8.58/b by the end of the month.

HSFO FOB ARA barges front-month crack hit a nadir of -$12.48/b on May 24 and closed the month at -$10.23/b.

Margins continued to recover through June but have weakened in the last week as crude oil gains outpaced sentiment for the shipping fuel.