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FUJAIRAH / WAM
Oil product stockpiles rebounded to a record high at the UAE’s East Coast Port of Fujairah as of June 1, led by gains in heavy fuels used in marine and power industries.
The total stockpiles climbed 6.5 percent in the week ended June 1 to 30.71 million barrels, according to data released June 3 by the Fujairah Oil Industry Zone (FOIZ). The total has hit four all-time highs in the last five weeks, signalling the global slump in gasoline demand to jet fuel and marine bunkers.
“The real demand is not there as of yet,” a source in Fujairah told S&P Global Platts. “The demand for bunker fuel is also reduced, and that’s a major factor because it’s one of the key activities. Demand for storage is still there, but the contango has been reduced so it’s not as attractive as it was a month ago.”
Heavy distillates and residues, covering fuels used for marine bunkers and power generation, jumped eight percent to a two-week high of 16.164 million barrels.
Light distillates such as gasoline increased seven percent to 8.549 million barrels, the highest since 17th June 2019, and middle distillates such as jet fuel rose two percent to a fourth consecutive all-time high of 5.997 million barrels.
Middle distillates have jumped for 10 weeks in a row, more than tripling over the period. But the light distillates category has climbed the most this year, rising by 79 percent, while middle distillates are up 61 percent and heavy distillates are 60 percent higher.
Total stockpiles have ballooned 65 percent this year with more than six months left. That compares with a seven percent gain for all of 2019, a 2.3 percent jump in 2018 and 12 percent drop in 2017.
Platts, the official publisher of the Fujairah oil products data, has been assessing gasoline cargoes FOB Fujairah since October 2016 and marine fuel 0.5 percent at the port since July 1.
As of 1st January 2020, the International Marine Organisation mandated burning of fuel with no more than 0.5 percent sulphur unless the vessel is
fitted with a scrubber.