- heavy distillates stocks down 33% from last year
- Saudi Arabia boosting fuel oil imports
- middle, light distillates supplies also falling
Oil product stocks fall to a six-week low on higher summer demand says an article on SP Global.
Stocks fall to a six-week low
Oil product stockpiles at the UAE’s Port of Fujairah dropped to a six-week low as air conditioning demand in the sweltering Middle East reduced supplies of fuel oils for power generation.
The total inventory stood at 21.176 million barrels as of July 5, down 8.2% from a week earlier and the lowest since May 24, data from the Fujairah Oil Industry Zone, or FOIZ, at the port on the UAE’s east coast showed July 7.
Heavy distillates and residues including fuel oils for power generation and marine bunkers dropped 6.8% to 11.051 million barrels, a 12-week low.
Demand for power generation
Temperatures are rising throughout the Middle East, leading to increased demand for fuels for power generation to run cranked-up air conditioners. Kuwait’s electricity demand reached an all-time high of 15,070 MW on June 6 due to high temperatures, and Iran’s power demand of 65,000 MW in recent days has far exceeded the capacity of about 54,000 MW.
Some 28,000 b/d of fuel oils headed out of Fujairah for Saudi Arabia in June, the highest monthly total since September 2020 and well above the 3,000 b/d in June 2020, according to commodity data company Kpler.
“The drop in residue stock is related to year-on-year growth of fuel oil burn for power generation due to hotter summer this year in the Middle East region,” Zhuwei Wang, lead Middle East oil market analyst at S&P Global Platts Analytics, said.
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Source: SP Global
