Total oil product stocks in Fujairah fell 3.6%, or 682,000 barrels to 18.251 million barrels, as demand for light distillates rose in the week leading up to Ramadan, according to data from the Fujairah Energy Data Committee, or FEDCom.
Stocks of light distillates fell 5.4% on the week to 6.943 million barrels, an eight-week low, as regional demand edged up ahead of the month-long Ramadan starting next week, S&P Global Platts Analytics said in a report.
Premiums for Arab Gulf RON 95 petrol were unchanged on the week at a near four-month high of $2.90/b Tuesday, May 8. But tepid demand in the Asia Pacific means there is still ample supply available for the Middle East. Stocks of heavy distillates and residues also fell 5.7% on the week to 9.019 million barrels.
Bunker market sentiment was reported as good in Fujairah in recent days, but buying activity has been complicated by rising crude prices and geopolitical uncertainties surrounding the Iranian nuclear deal. Iran is a major supplier of fuel oil, and the re-imposition of US sanctions, announced late-Tuesday will have a major impact on the bunker market.
Power generation demand in the region is building, with sources noting rising demand from Pakistan and Saudi Arabia in particular. Platts fixture logs have recently shown the unusual move of dirty oil products from the US Gulf Coast being exported to Saudi Arabia. Stocks of middle distillates rose 12.8% on the week to 2.289 million barrels, but are still rangebound, averaging 2.2 million barrels since the start of the year.
Demand for diesel remained firm from the Middle East and India ahead of Ramadan and the summer months, when gasoil demand generally rises for power generation. Middle distillate stocks in both Singapore and the ARA region have trended lower in recent weeks, reflecting tighter supply fundamentals.