As of Monday, October 15 total oil product stocks in Fujairah stood at 20.432 million barrels – up by 2.9% week on week. Stocks rose to a three-month high, reaching the 20 million barrel mark for the first time since time since July 16.
Stocks of light distillates rose by 7.6% week on week to 8.165 million barrels – the highest total since April 2. Lights were the largest of the three reported stocks category for the first time since April 2. High stock levels are indicative of weak gasoline fundamentals in both the West and East. The Middle East continues to see constant inflows from an oversupplied European market. At least 1.11 million mt or around 9.42 million barrels of gasoline loading in October from the West of Suez will head to the Middle East, Asia and Australia following the widening of the East/West spread, market sources said. This is despite a bearish outlook in the Singapore market, which has recently seen gasoline cracks narrow to three-month lows.
Stocks of middle distillates edged up by 0.3% week on week to 4.354 million barrels. Stocks remain at their highest since March 27, 2017. East of Suez gasoil sentiment remains positive, despite a firm Exchange of Futures for Swaps spread effectively keeping barrels in the region and pushing supplies from India and the Middle East to Singapore. According to an industry source, ‘Supply from North Asia [is] much less than August. EFS is strong, more Indian and Arab Gulf barrels [are] heading east, but easily absorbed’.
Stocks of heavy distillates and residues edged down by 0.3% week on week to 7.913 million barrels. Fujairah bunker fuel premiums continued to hold at range-bound levels from last week, as cargo supply is still tight even though the situation had eased compared to August and early September, trade sources said. Sentiment remains mixed amid continued uncertainty over the direction of crude prices.