Total refined product stocks at the UAE port of Fujairah stood at 16.665 million barrels in the week to November 27, up 5% from the previous week, according to data from the Fujairah Energy Data Committee, or FEDCom.
After hitting a record low on November 13, stocks have risen by 10% in two weeks on the back of a rebound in heavy distillate volumes, S&P Global Platts Analytics said in a report.
Stocks of light distillates fell by 9.1 % week on week to 4.267 million barrels, but have remained largely range bound over the past two months, the data showed.
Globally, petrol trading activity saw a lull recently due to the Thanksgiving holiday in the US.
Stocks of middle distillates fell by 2.7% week on week to 1.49 million barrels, marking the second consecutive record low for middle stocks.
Stocks of heavy distillates and residues rose by 13.1% week on week to 10.908 million barrels, the data showed. Stocks climbed above 10 million barrels for the first time in nine weeks, and are up by 31% from a nine-month low of 8.32 million barrels on November 13.
A backwardated market structure has weighed against holding fuel oil in storage, but this has moderated recently. The front month backwardation in Arab Gulf 180 CST swaps has narrowed to an average of $1.10/mt so far this month, compared with $1.73/mt in October and $2.02/mt in September.
Cargoes moving from the Middle East to Singapore are estimated at 2.5 million mt for November and will likely edge higher in December, with Singapore fuel oil prices currently $7-$8/mt above the Arab Gulf. Added to this, the Fujairah bunker market is still seeing sluggish demand, with less regional need for fuel oil in power generation due to the winter season, Platts Analytics said.