Stockpiles of gasoline and other light distillates at Fujairah on the UAE’s east coast plunged the most on record to the lowest level since at least 2017, pushing total oil products inventories to a 13-month low.
The total on Oct. 26 stood at 18.465 million barrels, down 9.2% from a week earlier and the lowest since Sept. 9, 2019, according to data compiled by S&P Global Platts and released from the Fujairah Oil Industry Zone on Oct. 28. Light distillates tumbled 31% at 4.198 million barrels, the biggest weekly drop on record and the lowest since the data series started in January 2017.
The sharp fall in light distillate inventories traces the rise in demand for gasoline in the Middle East, where restrictions continue to ease amid declining COVID-19 cases in a few countries.
Saudi Arabia, for instance, has seen domestic driving activity rise. It reported only 399 new infected cases of the virus as of Oct. 27, down from a daily average of 614 cases in September and 2,877 cases in August, according to data from Johns Hopkins University. In addition, import demand from Pakistan and Africa has kept export activity from Fujairah port healthy, with shipments destined for Karachi and Africa’s eastern and southern ports, industry sources said.
“Supply-side factors also play a part. The refineries in the Middle East are not running at full rates. So naturally there will be drawdowns in supplies,” one market participant said.
Moreover, Kuwait’s 466,000 b/d Mina Al-Ahmadi refinery, Bahrain’s 267,000 b/d Sitra refinery, as well as the 80,000 b/d Uniper plant in Fujairah, were all heard to have had works carried out in October, Platts reported earlier.
Fujairah’s heavy distillates stocks stood at 9.947 million barrels as of Oct. 26, down 4% from a week earlier while middle distillates jumped almost 10% at 4.32 million barrels — a two-week high. The total stockpile is now down 40% from the record 30.71 million barrels on June 1.