FUJAIRAH, Oil product stocks at the Middle East’s key oil hub of Fujairah fell another 3.3 percent in the week to Monday, a new seven-week low, as light distillate inventories slipped to their lowest level of the year.
Total oil stocks were 18.114 million barrels, down 625,000 barrels from a week earlier, according to the Fujairah Energy Data Committee.
Light distillates had the biggest decline again in the week, falling 15.9 percent to just 4.83 million barrels, the lowest so far this year, the data showed.
Gasoline demand east of Suez has seen improved sentiment led by stronger US cracks and the emergence of additional demand from other regions. Recent fixtures have seen East Africa, Latin America and the US Atlantic Coast sourcing gasoline barrels from Asia and the Middle East, S&P Global Platts Analytics said in a report Wednesday.
“The market has been supportive and will maintain until at least for August,” a source with a refiner said. Cargoes had been spotted moving from the East of Suez out to west coast Mexico or the US Atlantic Coast, along with movements from Taiwan and Singapore to the Arabian Gulf. “On paper it is workable to move gasoline from the East to [the Middle East],” the refiner said.
At the same time, stocks of middle distillates rose 9.5 percent to 2.931 million barrels. This is a rebound from the eight-week low last week. Middle distillates have had improved sentiment, with the first/second month time spread for Arab Gulf gasoil swaps advancing to a backwardation of 28 cents/b, Platts Analytics said in the report.
However, it noted that further gains could be limited by ongoing heavy exports of gasoil from India and a limited arbitrage pull from the West of Suez. Meanwhile, Middle East jet demand continues to be supported by a steady pull from Africa and buying interest further West. Sources said oversupply in the region continued to cap gains.
Stocks of heavy distillates and residues also edged upwards, gaining 0.3 percent to 10.353 million barrels. Fujairah has had strong bunker demand over the past week with prices more becoming more competitive than in Singapore.
“Price levels were still good for buying at Fujairah compared to Singapore,” one Fujairah bunker fuel trader said. Fujairah 380 CST delivered bunker prices are currently US $8/mt below Singapore compared to an average of US $2/mt higher since the start of the year. Singapore prices have rallied owing to tight supply over the past two months, though arbitrage arrivals for September are expected to be higher than August.
S&P Global Platts holds exclusive rights to publish Fujairah oil inventory data and has deployed a blockchain network for its collation.
Source: Emirates News Agency