Fujairah VLSFO premium widens versus Singapore

Stocks of oil products at Fujairah climbed 59% in the week to 21 September and reached their highest level in five months, based on Fujairah Oil Industry Zone figures. Heavy distillates, the group that includes ship fuel, grew the most.

The bigger stock has not yet made very low sulphur fuel oil (VLSFO) easy to buy in the port. A Middle East trader told Platts that supply is still limited and that fresh cargoes are not expected before October. The premium for VLSFO delivered at Fujairah over Singapore cargo prices widened over the week.

High sulphur fuel oil looks easier. The same trader said supply improved after recent deliveries, and the HSFO premium at Fujairah slipped a little. The tight VLSFO market is not new. Fuel oil imports fell sharply in the spring during the Middle East crisis, and by June most offers in Fujairah were made only against firm enquiries.

For buyers, VLSFO at Fujairah may stay tight and costly until the October cargoes arrive. If the voyage allows it, compare the cost of lifting in Singapore or another hub, and send Fujairah enquiries with more notice than usual.