Total refined product stocks at the UAE port of Fujairah were 15.230 million barrels in the week to October 30, down 4.2% from the previous week, according to data from the Fujairah Energy Data Committee (FEDCom).
Total stocks sank to a new record low for the second week in a row, as the markets stayed in backwardation, and rising prices gave an incentive to sell quickly, Platts Analytics said.
Stocks of light distillates diverged from the general downward trend, however, rising by 13.6% week on week to 4.845 million barrels. The increase is in part down to strong demand from the Middle East, which has drawn in material from Asia. Some Indian products, which would normally find a home in Asia, have been drawn to the Middle East instead, further restricting supply.
The opposite was true for stocks of middle distillates, which fell by 22.3% week on week to a record low 1.744 million barrels. There is no longer any arbitrage to move gasoil to Europe from Asia, but volumes from the Middle East continued to make their way westward, Platts Analytics said.
Diesel and gasoil stocks in Europe’s Amsterdam-Rotterdam-Antwerp hub fell by 3% to 2.171 million mt in the week to Wednesday, their lowest since June 2014, PJK International data showed. Additional spot supplies of gasoil have emerged as the bulk of ongoing refinery maintenance in both the Middle East and Asia will soon be completed.
Stocks of heavy distillates and residues also fell by 7.9% to 8.641 million barrels, an eight-month low. Fuel oil is currently backwardated in Singapore, meaning traders in ARA and the Middle East have little incentive to keep volumes in storage, Platts Analytics said.
Power demand is also high in Iran due to a recovery of the economy, reducing exports from Iran. With Middle East premiums high, flows to Singapore are likely to slow down in the coming weeks, Platts Analytics said.