Fujairah data: Oil product stocks climb to highest since record in February

Dubai — Volumes of oil products held in storage at Fujairah climbed to their highest since the all-time high seen in February as tumbling demand from the coronavirus pandemic left more supplies in the eastern UAE port.

Stocks rose 5.3% over the past week to 24.953 million barrels as of Monday, with the greatest build seen in light distillates, according to data released Wednesday by the Fujairah Oil Industry Zone. Stocks are now the highest since the record of 25.98 million barrels was set on February 24. The Fujairah stock reporting began in January 2017.

"With the demand depression caused by coronavirus, crude and oil product markets are in a steep contango structure," Alex Yap, senior analyst at S&P Global Platts Analytics in Singapore, said. "This incentivizes companies to hold oil in storage."

Light distillate inventories jumped 21% in the week to a total of 6.94 million barrels, a four-week high, the data showed. Market sources said the gasoline market East of Suez has a glut of supply due to regional travel restrictions to contain the coronavirus. Gasoline demand this month is expected to be 50% lower than normal in Saudi Arabia and 55% lower in India, the International Energy Agency said in a report Wednesday. Demand is expected to remain below normal for the next several months, reaching 40% below normal for both countries in May and 5% below normal in June, it said.

Physical 92 RON gasoline cargoes stood at a $13.20/b discount to front-month ICE Brent futures on Tuesday, a drop of $2.74/b week on week, S&P Global Platts data showed.

In middle distillates, stocks built by 15% to 2.919 million barrels, also a four-week high, the data showed. India's shaky demand for gasoil, as well as plentiful surplus volumes being pushed into the spot market, has had a negative impact on the East of Suez middle distillates market, sources said.

Stocks of heavy distillates and residues stood at 15.094 million barrels, down 2% from the record 15.445 million set a week earlier. Bunker traders in Fujairah said they saw an uptick in demand this week. "Demand is good and we are getting orders for 20,000 mt to 30,000 mt," a bunker trader said.

Platts is the official publisher of the oil products data and Fujairah has the Middle East's largest commercial storage capacity for refined oil products.