Fujairah stockpiles of oil products dropped to a four-month low on Aug. 17, with middle distillates such as jet fuel and gasoil leading the way.
The total fell to 24.034 million barrels, down 0.8% from a week earlier and the lowest since April 20, according to data released Aug. 19 by the Fujairah Oil Industry Zone. The Port of Fujairah has storage facilities for about 40 million barrels of oil products and about 20 million barrels of crude oil. The inventory report only applies to oil products.
Middle distillates slumped 3.8% to 3.389 million barrels, the lowest since April 13, while heavy distillates such as fuel used for power generation and marine bunkers dropped 0.3% to 13.751 million barrels, the lowest since April 27, according to the data provided exclusively to S&P Global Platts. Light distillates such as gasoline and naphtha also fell 0.3% to 6.894 million barrels, the lowest since July 27.
Stockpiles have dropped 22% from a record high on June 1 as demand for oil products improved with nations easing COVID-19 restrictions. Gasoline demand in particular, is on the rebound in the region, with Dubai driving activity roaring back to pre-pandemic levels in recent days, according to mobility data from Apple.
The recovery in jet fuel demand has been slower, prompting some suppliers to use jet fuel as a blending component to make low sulfur marine gasoil since July, Platts previously reported. The bunker market is still “out of balance” as demand was curbed by the coronavirus pandemic, Henrik Zederkof, senior director of Bunker Holding and chairman of the International Bunker Industry Association, told an online conference on Aug. 18.
The Port of Fujairah is developing an oil trading and bunkering hub that is the only multi-purpose port on the UAE’s eastern seaboard. It is approximately 70 nautical miles from the Strait of Hormuz, the key choke point for oil and gas ships traversing the Persian Gulf.