Oil product stockpiles at the Middle East’s key oil hub of Fujairah rose 6.4% in the week to Monday, climbing to a record high for a second consecutive week as light, middle and heavy distillates all saw builds.
Total product stocks were 27.859 million barrels, up from the previous high of 26.192 million barrels a week earlier, according to data released Wednesday by the Fujairah Oil Industry Zone. S&P Global Platts has been the official publisher of the oil stock data since January 2017.
The biggest increase was in middle distillates, which rose 13% to 5.466 million barrels, an all-time high for that category. The previous record was on February 6, 2017. Middle distillates include gasoil, diesel, marine bunker gasoil, jet fuel and kerosene.
Jet fuel imports into Fujairah climbed to a two-year high in April, according to cargo tracking data from Kpler, in a sign that traders may be betting on higher prices as airlines slowly add more passenger flights and countries ease COVID-19 lockdowns.
“The demand is there, the thing is now all the storage is taken up,” Tarun Arora, general manager of oil products storage company GPS Chemoil in Fujairah, said.
GPS Chemoil is one of 11 companies that report weekly product inventories to Fujairah. It has capacity to store 4.4 million barrels of refined products in 30 tanks and they are 100% leased out, Arora said. Overall, Fujairah has capacity to store about 40 million barrels of oil products.
Light distillates stocks rose 11% to 7.482 million barrels, a two-month high. The category includes gasoline, gasoline blending components such as reformate and alkylate, along with naphtha and other light petrochemical feedstocks. Saudi Arabia’s gasoline demand is set to rebound as the kingdom lowered domestic gasoline prices, Platts reported this week.
Heavy distillate and residue stocks advanced 2% on the week to 14.911 million barrels, a four-week high. The category includes fuel used for marine bunkers and for power generation.
Platts said in a report on Wednesday that bunker demand has waned in Fujairah with buyers looking to cover requirements toward the end of May and early June. “We are expecting May demand to be even less than in April. We did not receive many inquiries in the last two weeks,” a trader told Platts. Delivered marine fuel 0.5% sulfur bunkers were assessed in Fujairah at $225/mt on Tuesday, down $2/mt for the week.