FUJAIRAH DATA: Oil product stocks continue rising amid demand headwinds

Oil product stockpiles at the UAE's Port of Fujairah reached their highest since early June, amid patchy demand for bunker fuel and middle distillates as well as limited gasoline exports, according to Fujairah Oil Industry Zone data.

Total inventories rose 9.3% in the week ended July 15 to 20.02 million barrels, the data published July 17 showed. The stocks are almost at their latest high of 20.73 million barrels on June 10 and approaching their five-year average of 20.07 million barrels.

Light distillates showed the biggest increase, climbing 18.7% on the week to 6.81 million barrels and exceeding their five-year average of 6.45 million barrels.

Despite the rise in stocks at Fujairah, prompt prices for gasoline have been supported by limited output in refining heavyweights China and South Korea. Lower shipments of gasoline from the Persian Gulf to Asia as well as run cuts, amid stable demand, have also supported Asian prices, traders said.

Inventories of middle distillates rose 1.5% on the week to 3.20 million barrels, slightly above the five-year average of 3.17 million barrels.

The East of Suez gasoil complex was largely rangebound as traders awaited further clarity on near-term demand and supply. Trade sources said the regional gasoil complex was holding up better than expected despite the seasonal lull. "Considering the monsoon season in India and Thailand, the VLCCs [carrying clean products(opens in a new tab)] from the Arab Gulf heading for Europe helps," a trader said. "But overall economy still performing badly, so I cannot be too bullish on diesel."

Bunker outlook mixed

Residues stocks rose 6.2% on the week to 10.00 million barrels, below the five-year average of 11.08 million barrels.

Bunker demand(opens in a new tab) at Fujairah has been mixed, with stock builds in the high sulfur fuel oil segment likely to weigh on prices in the near term and demand for very low sulfur fuel oil average to above moderate, traders said.

Choppy sea conditions have recently led to the postponement of bunker barge reloads at terminals, leading to slower-than-usual stock draws, according to bunker suppliers.

As a result, some sellers have been more conservative than usual, exercising caution against overcommitment, bunker suppliers said.

Platts, part of S&P Global Commodity Insights, assessed the Fujairah delivered marine fuel 0.5% sulfur bunker premium over benchmark FOB Singapore marine fuel 0.5%S cargoes at an average of $12.55/mt over July 1-16, higher than the equivalent period in June, when it was $10.41/mt. The premium was assessed at 15.95/mt on July 16.