FUJAIRAH DATA: Oil product stocks at two-week high despite plunge in middle distillates

Oil product stockpiles at the UAE's Port of Fujairah have climbed to a two-week high even as diesel and other middle distillates slumped close to the record low.

The total inventory was 17.113 million barrels as of April 11, up 7.2% from a week earlier to the highest since March 28, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Commodity Insights on April 13.

Middle distillates including diesel and gasoil plunged 36.9% over the period to 1.18 million barrels, close to the record low of 1.103 million barrels set on March 7.

Backwardation in the gasoil market was discouraging storage, traders said.

Gasoline, naphtha and other light distillates led the rebound in total stocks, showing a 44.6% jump over the week to April 11 to 4.932 million barrels, the highest in two weeks. Stockpiles may climb even higher as China was expected to boost gasoline exports in April, market sources said.

Heavy distillates used as fuels for power generation and for marine bunkers gained 2.9% over the same period to 11.001 million barrels, the highest since Jan. 31.

The increase in Fujairah heavy distillates was largely in high sulfur fuel oil, traders said. Ample HSFO supplies have led sellers to offer parcels with a relatively quick turnaround, with some within 2-3 days, local bunker suppliers said.

Premiums of Fujairah-delivered 380 CST HSFO against the FOB Arab Gulf 180 CST HSFO cargo assessments averaged $21.51/mt on April 11-12, down from $24.02/mt for the week ended April 8, S&P Global data showed.

Amid the ongoing Russia-Ukraine conflict, self-sanctioning measures have continued to put a lid on overall bunker demand, market sources said.

As for low sulfur fuel oil, availability has improved in April as some suppliers in Fujairah who avoided Russian feedstocks for LSFO have found alternatives in Europe and there are plans to also source from Singapore, bunker suppliers said. That is likely to lead to even higher heavy distillates inventories, they said.

The premium of Fujairah-delivered marine fuel 0.5%S over the benchmark FOB Singapore marine fuel 0.5%S cargo assessments averaged $44.22/mt on April 11-12, down from $46.72 for the week ended April 8, S&P Global data showed.

Despite the increased inventories for the past three weeks, heavy distillates as of April 11 were 1.9% lower than a year earlier, joining light and middle distillates in being lower than this time last year. Heavy distillates had been 29.8% higher in the past year as of April 4.

The total inventory as of April 11 was 17.6% lower than a year earlier, with light distillates down 20.59% and middle distillates off by 64.75%.