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Fujairah: Oil product stocks down 2.5%

Fujairah: Oil product stocks down 2.5%
As of Monday, August 20, total oil product stocks in Fujairah stood at 18.098 million barrels – down by 2.5% week on week.

Stocks of light distillates rose by 11.5% week on week to 5.41 million barrels. Regional supply balances have been tightened by the recent force majeure on petrol exports by India's Reliance. This was due to an unplanned FCC unit shutdown at its Jamnagar refinery. Reliance is India's largest exporter of petrol and other oil products, and reduced supply from India could lead the Middle East to source additional petrol from Europe. Sources noted a fixture by Saudi Aramco to lift 60,000 mt of petrol via ship-to-ship transfer from Suez to Jeddah, loading August 27. This would add to West of Suez petrol slated to land in the Middle East. Up to six LR1 tankers, which typically ship 60,000 mt parcels of petrol, were slated to bring in European petrol to the Arab Gulf, sources said.

Stocks of middle distillates rose by 6.5% week on week to 3.749 million barrels. Sentiment in the gasoil market has been bullish due to the Reliance force majeure, although there has been no indication of any impact on gasoil or jet supplies. Gasoil balances are expected to tighten over the next few months from the likes of India, Thailand and Vietnam as seasonal demand pickups with the end of the rainy season in late-September and October. Elsewhere, jet fuel market participants were concerned about the Middle Eastern and Indian spot market, with economics to move cargoes either East or West of Suez remaining unattractive. 'Arbitrage economics to the West is no good, and not good to the East too,' a Singapore-based trader said

Stocks of heavy distillates and residues fell by 3.8% week on week to 8.939 million barrels. Bunker activity in Fujairah was quiet this week due to Eid holidays. Fujairah has seen healthy bunker demand in recent weeks, due in part to lower prices compared to Singapore. But a softer Singapore market has seen a sharp narrowing in that differential over the past week. Delivered 380 CST bunker prices in Fujairah were assessed at 50 cents/ mt below Singapore yesterday, down from a spread of around $9/mt a week ago.

Meanwhile, the Reliance FCC outage may have some knock-on effect on Fujairah's bunker market. Reliance typically sells one to two 40,000-mt cargoes of FCC bottoms, which is referred to as carbon black feedstock, or CBFS, traders said. This product typically heads to Fujairah where it is used as a cutter stock to make RMG grade 380 CST bunker fuel. The feedstock typically has a sulfur content of 1.3%-2.8% and viscosity range from 160 CST to 380 CST, according to the traders. 'Fujairah may have to find a substitute for this feedstock from Europe,' a Singapore-based trader said.



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