Total refined product stocks at the UAE port of Fujairah stood at 16.62 million barrels in the week to December 11, down 8.6% from the previous week, according to data from the Fujairah Energy Data Committee.
The decline was primarily down to a significant draw on heavy distillates, S&P Global Platts Analytics said in a report. In the previous week stocks had risen to an 11-week high of 18.18 million barrels. Stocks of heavy distillates and residues fell 13.4% in the week to December 11 to 10.664 million barrels. This was the first drop in four weeks, snapping the recent rebound from the record low of November 13. As much as half of the fuel oil volumes departing Fujairah in the past week were heading for Singapore, local sources said.
Stocks of middle distillates are still close to recent lows, despite a rise of 16% week on week to 1.406 million barrels. This was the first week-on-week rise in middle distillate stocks after three consecutive record lows. Medium-sulfur gasoil continues to see ample demand in the Middle East, North Africa and South Asia, while low-sulfur diesel is relatively weaker due to the closed arbitrage.
Disruptions at the Forties pipeline are expected to have little impact on the European diesel market due to ample supply, but is affecting petrol. The diesel arbitrage from the US Gulf Coast to Europe has been closed in recent weeks, with diesel in fact moving across the Atlantic in the opposite direction towards Latin America and the US Atlantic Coast, Platts Analytics said.
Stocks of light distillates edged down 2.2% to 4.555 million barrels, in line with recent levels. Petrol market sentiment was supported by possible supply tightness both East and West of Suez. A fire at an RFCC unit at Indian Oil's Paradip refinery added to expectations of supply tightness, with the Middle East already seeing a number of refinery maintenance outages.
Recent weeks have seen European petrol drawn to meet strong Middle Eastern demand, but this flow could now be reduced, possibly pulling Indian barrels to the region.
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