Fujairah's commercial stocks of refined oil products was 18.982 million barrels in the week to Monday, September 18, almost flat on the week after edging down by just 1,000 barrels.
The stocks have remained below 20 million barrels for a fourth consecutive week since large-scale refinery shutdowns in Texas related to Hurricane Harvey rocked global oil products markets, data released Wednesday, September 20 by the Fujairah Energy Data Committee showed.
The lack of movement in total oil product inventories at the UAE Arabian Sea port, however, masked significant changes in stock levels for light and middle distillates. Stocks of light distillates, predominantly petrol and naphtha, rose by 407,000 barrels, or 7.7%, to 5.709 million barrels, rebounding to a four-week high after falling 6.7% the previous week. Nonetheless, they have remained below 6 million barrels for the past four weeks, sharply down from nearly 6.8 million barrels in the week ended August 21. The global impact of supply disruptions from Hurricane Harvey have eased substantially since the beginning of September, when petrol supplies were moving west from the Middle East, drawn by hurricane-related shortfalls in the US combined with an unexpected short-term supply disruption in western Europe following a fire at a major refinery. But petrol cracks in Asia, Europe and the US have now reverted to pre-Harvey levels.
Fundamentals in the East of Suez petrol markets are currently seen as balanced, with steady supply against firm demand from Indonesia, Vietnam and the Middle East. The first/second month structure for Arab Gulf Gasoline 95 swaps was little changed on the week at a backwardation of $1.15/mt Tuesday. Fujairah stocks of middle distillates fell 596,000 barrels, or 19.7%, on the week to 2.424 million barrels following an 11.2% draw the previous week. Their level as of September 18 was the lowest since the beginning of Fujairah weekly stocks reporting in early January. The second lowest total of 2.481 million barrels was reported for the week ended June 5.
With available supplies to Europe from the US reduced, the east-west Gasoil Exchange of Futures for Swaps (EFS) has widened to below minus $20/mt recently from minus $10/mt in early September, indicating an open arbitrage window for Asian and Middle East gasoil cargoes to Europe. Supply from the Persian Gulf region and India could remain tight until US supply recovers.
Fujairah's stocks of heavy distillates and residues, which constitute more than half the total oil products inventory at the port, rose on the week by a modest 188,000 barrels, or 1.8%, to 10.849 million barrels, countering a slight dip the previous week. Demand for bunkers in Fujairah has been mostly steady in recent weeks, Asian sources said. Fujairah 380 CST delivered bunkers continued to be priced at a discount to Singapore, although the gap had narrowed to $3/mt Tuesday from $5.50/mt a week earlier.
Reduced fuel arrivals at Singapore are expected in October, while bunker demand there is seen as robust. The first/second month structure for Arab Gulf 180 CST high-sulfur fuel oil (HSFO) swaps strengthened to a backwardation of $2.25/mt Tuesday, tracking the firmer sentiment in the Singapore market.