Total oil product stocks at the UAE port of Fujairah were almost unchanged at 16.825 million barrels as of Monday, February 5, edging up just 0.3% on the week, despite a 23.6% drop in middle distillate figures, according to latest data from the Fujairah Energy Data Committee, or FEDCom.
Stocks of light distillates rose by 4.3% week on week to 7.846 million barrels, the second highest total on record. Stocks are currently 1.5 million barrels, or 24%, higher than this time last year. The FOB Arab Gulf petrol market remains bearish on ample supply and a dearth of cargoes changing hands, S&P Global Platts Analytics said in a report.
Global petrol supplies have been high due to strong refinery runs through the winter, but the market is expected to tighten as refinery maintenance starts. Therefore, light stock levels could fall from current highs over the next few weeks, the report said. The front-month time spread for Arab Gulf petrol RON 95 also flipped into backwardation this week, having been in contango since late-December.
Stocks of middle distillates fell by 23.6% or 613,000 barrels to 1.979 million barrels, down from last week's three-month high. The inventories are 62% lower year on year, having been drawn down by healthy demand due to a colder winter in the Northern Hemisphere. Supply will be constrained by current and upcoming refinery maintenance, the report said, with one of the region's major gasoil exporters, Saudi Aramco Total Refining and Petrochemical, undergoing a 46-day maintenance outage to its 200,000 b/d train 1 CDU from January 8.
Stocks of heavy distillates and residues rose to 7 million barrels, climbing 5.1% from last week's record low. Heavy stocks have averaged 21% lower year on year so far this year on a flat market structure and a weak outlook for demand.
The bunker market was quiet as buyers stayed on the sidelines given falling crude prices, hoping to pick up material at lower prices. Front-month ICE Brent futures closed at a five-week low of $66.99/b Tuesday, after hitting a three-year high of $70.71/b on January 25.
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