Oil product stocks in the Middle East’s key oil hub of Fujairah rose 11.1% in the week to Monday, with inventory levels up across all reported categories. Total oil product stocks in Fujairah were 19.379 million barrels, up 1.93 million barrels from a week earlier, according to data from the Fujairah Energy Data Committee, or FEDCom.
The biggest increase was in stocks of heavy distillates and residues, which rose 17% in the week to Monday, reaching 9.202 million barrels, a sharp rebound from earlier six-week lows, S&P Global Platts Analytics said in a report Wednesday. Strategically located outside the Strait of Hormuz choke point, Fujairah has not only become the world’s second largest bunkering port, but is increasingly an important hub for trading and storage.
Bunker demand in Fujairah remains strong positive despite high outright prices for bunkers as a result of rising crude prices. July ICE Brent crude futures were at $79.11/b, during mid-afternoon trade in Asia Wednesday.
Trade sources reported plenty of “keen sellers” in the market looking to lock in recent price gains, while demand is seeing a pickup as crude and oil product shipping activity rises post-refinery maintenance. Additional demand is also emerging from the power generation sector, with Pakistan State Oil continuing to buy volumes of HSFO, and seeking another 195,000 mt for July delivery — down slightly from 210,000 mt for June, the report said.
Meanwhile, stocks of light distillates were up 6.1% on the week to 7.504 million barrels. This is despite rising demand across both Asia and the Middle East with the beginning of Ramadan, highlighted by Indonesia’s Pertamina seeking 1 million barrels of gasoline for June delivery. Kuwait’s KPC has also been looking for 50,000 mt of gasoline for delivery over late-May and early-June. Premiums for Arab Gulf RON 95 gasoline continue to edge higher and were at $3.15/b Tuesday — a four-month high, the report said. At the same time, middle distillate stocks rose 6.3% to a new six-week high of 2.673 million barrels. The levels remain range-bound, however, and have not pushed above 3 million barrels since September 11, 2017.
Middle distillate fundamentals in the East of Suez remain balanced, with supply trending higher post-maintenance but gasoil demand also rising heading into the summer. Cargoes of gasoil and jet continue to head from the East towards European markets despite an unsupportive Exchange of Futures for Swaps, Platts Analytics said. S&P Global Platts holds exclusive rights to publish Fujairah oil inventory data and has deployed a Blockchain network for its collation.
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24th May 2018