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Heavy distillates stockpiles tumble most in 2020 at Fujairah
2nd September 2020 22:00 GMT

Fujairah oil product stockpiles dropped to a two-week low on Aug. 31, with heavy distillates such as marine bunkers tumbling 14% week on week, the biggest decline since December 2019.

Total stockpiles stood at 25.124 million barrels on Aug. 31, down 5.8% from a week earlier, the biggest drop since April, according to data shared by the Fujairah Oil Industry Zone, or FOIZ, on Sept. 2. Light and middle distillates inventories climbed in the week to Aug. 31.

Inventories of heavy distillates, which also include fuel for power generation, have dropped 22% from the record 17.168 million barrels on June 8, at a time of peak electricity demand for air conditioning and increased crude production from OPEC. The 23-country OPEC+ alliance implemented a historic 9.7 million b/d cut pact starting in May, which was rolled back to 7.7 million b/d in August.

"The general consensus is that August was a busier month for bunker traders compared to June and July," Apurva Mali, founder of bunker supplier Masc Co. DMCC in Dubai, told S&P Global Platts. "Bunker demand has and will always be largely related to the movement of ships in the region, especially oil tankers. More oil production equals more ships trading in the Gulf and equals more bunkers sold in Fujairah."

Heavy distillates stockpiles fell to 13.318 million barrels as of Aug. 31, the lowest since April. Delivered marine fuel with 0.5% sulfur at Fujairah was at $325/mt on Sept. 1, down $5/mt from a week earlier, while Singapore was at $343/mt, according to Platts data.

Middle distillates such as jet fuel and gasoil advanced 3% in the week to Aug. 31 to 4.24 million barrels, a five-week high, while light distillates such as gasoline and naphtha climbed 7% to 7.566 million barrels, the highest since June 29.

"We're getting busier and busier, it won't be long before we're back to levels where we were a year ago," Tony Quinn, operating partner of Prostar Capital and CEO of Tankbank International in Singapore, told Platts.

Prostar's jointly owned Fujairah storage companies -- Fujairah Oil Terminal and GTI Fujairah -- are fully contracted out and are about 70% full by volume of product, he said.

Trade flows in Fujairah are typically fuel oil in from Iraq and the region, and fuel oil goes out to Singapore and gasoline to Pakistan and Africa, he said. “There is a normalization of business happening, there are no restrictions on shipment movements.”

FOIZ provides the inventory data exclusively to Platts.


Platts ,
2nd September 2020 22:00 GMT