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Fujairah: Oil product stocks up 2.5% week on week

Fujairah: Oil product stocks up 2.5% week on week
Fujairah's commercial stocks of refined oil products rose 2.5% to 19.816 million barrels in the week to Monday (September 4), remaining below 20 million barrels for a second week since large-scale refinery shut-downs in Texas related to Hurricane Harvey sent shock waves through global markets for oil products.

Total stocks at the UAE Arabian Sea port were buoyed by a 540,000 barrels build in combined stocks of light and middle distillates, data released Wednesday (September 6) by the Fujairah Energy Data Committee showed. Meanwhile, heavy distillate and residue stocks, which make up more than half of total Fujairah oil product stocks, dipped 53,000 barrels, with stocks remaining broadly flat for a second consecutive week.

Stocks of light distillates, predominantly petrol and naphtha, rose 5.3% to 5.68 million barrels from a 10-week low of 5.394 million barrels the previous week when they had fallen 1.393 million barrels, or 20.5% - the largest weekly drop in terms of volume and the second largest as a percentage, since S&P Global Platts started tracking Fujairah stock data in January. Trading sources last week cited naphtha volumes headed for Asia as petrochemicals feedstock as the main driver for the large draw in the week ended August 28, which nonetheless also followed hard on the heels of the emergency shutdown of about 25% of US Gulf Coast refining capacity due to heavy floods in Texas and Louisiana after Harvey made landfall.

HARVEY EFFECT RECEDES

This past week, while there was little apparent reason for Asian demand for naphtha to take a sudden downturn, the European petrol draw across the Atlantic to meet hurricane-related US shortfalls had started to ease. US Gulf Coast refineries and ports were in the process of returning to service while Colonial Pipeline, the largest US refined products pipeline and which had also been closed due to floods, resumed operations from Houston.

In the east of Suez market, planned refinery maintenance in Indonesia was further supporting Asian demand for light

distillates, while differentials between Mean of Platts Singapore (MOPS) and Free On Board (FOB) Fujairah petrol prices were little changed over the week. Fujairah stocks of middle distillates rose 8.1% to 3.402 million barrels,

despite supply disruption of gasoil cargoes from the US Gulf Coast to Northwest Europe and the Mediterranean due to

Harvey resulting in lower than average stock levels in the Amsterdam-Rotterdam-Antwerp region.

However, high freight rates to move cargoes to Europe from the Middle East were keeping a lid on trade flow between the two regions. At the same time, rising gasoil outflows from India, which have exacerbated the supply overhang in the Asian market amid the current low demand during the monsoon season, may have contributed to the build in Fujairah middle distillate stocks.

In Singapore, middle distillate stocks have also risen, reaching a three-month high of 13.768 million barrels last week.

FUJAIRAH BUNKERS DISCOUNTED VERSUS SINGAPORE

Fujairah's stocks of heavy distillates and residues totaled 10.734 million barrels on Monday, down 0.5% week on week.

Demand for bunker fuel in both Fujairah and Singapore has been healthy over the past week. Prices for Fujairah 380

CST delivered bunker fuel, however, slipped to a discount to Singapore last week. It traded at a discount of about

$4/mt, down from a $1.25/mt premium the previous week and from $2-$3/mt the week before that.

The first-month/second-month backwardated structure for Arab Gulf 180 CST high sulfur fuel oil swaps widened

further to an eight-week high of $1.50/mt from $1/mt in the previous week as increasing volumes were shipped to

Singapore from the Middle East.



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