FUJAIRAH DATA: Oil product stocks gain led by surge in middle distillates

Oil product inventories at the UAE's Port of Fujairah climbed for a second consecutive week, led by a 35% jump in middle distillates with another large gasoil/diesel cargo from Saudi Arabia.

Total inventory was 19.416 million barrels as of Aug. 16, up 0.3% from a week earlier, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Platts Aug. 18.

The 35% jump in middle distillates was the biggest weekly expansion since November 2019 and put stocks at 4.045 million barrels, the highest in eight weeks.

Fujairah has seen relatively strong imports of diesel/gasoil in recent weeks, with the four-week moving average at 597,000 barrels in the week started Aug. 9, the most since June 21, according to commodity data company Kpler.

Saudi Arabia accounted for all 644,000 barrels of gasoil/diesel imports headed to Fujairah for the week started Aug. 9, the most from the neighboring kingdom since Jan. 11, the Kpler data showed.

Middle distillate stocks are 14.8% higher than a year ago, the only category showing a gain over the past 12 months.

Heavy distillate stocks dropped 10% on the week to 9.769 million barrels, a four-month low, the FOIZ data showed. The category includes fuels for power generation and marine bunkers. Fujairah, the world's third-largest bunkering hub, showed a 2.8% on the month gain in July bunker sales to its highest this year, according to data recently provided by FOIZ.

The decline in heavy distillate stocks in August is more related to limited supply from refineries, rather than an increase in demand, Fujairah bunker traders said.

"Overall, short term supply is definitely tight in the area, and it is likely to be the major contributor given that demand has been marginal," a trader said. There are three refineries at Fujairah, and HSFO is especially tight, another trader said.

Fujairah-delivered high sulfur bunker fuel was assessed at $418/mt on Aug. 18, unchanged on the day after climbing from a record low of $115/mt in April 2020, according to Platts data. The premium for Fujairah-delivered 380 CST HSFO against the Mean of Platts Arab Gulf 380 CST cargo was assessed at $43.88/mt on Aug. 18, up from an average of $40.73/mt in the week ended Aug. 13.

Stockpiles of light distillates, including gasoline and naphtha, rose 1.7% on the week to 5.602 million barrels, a three-week high.

Total inventories are 19.9% lower than a year ago, while light distillates are down 19.0% and heavy distillates have dropped 29.2%.