Oil Stockpiles Fall To 5-month Low As Fuel Oils Decline 11% on Week

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  • Heavy distillates stocks down 36.8% in past year
  • Bunker market strengthens

Stockpiles of oil products at the UAE’s Port of Fujairah declined to a five-month low with fuel oils for power generation and marine bunkers leading the way, reports Platts.

Fall in heavy distillates

The total inventory was 18.278 million barrels as of Aug. 23, down 5.9% from a week earlier and the lowest since March 22, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Platts on Aug. 25. Heavy distillates, or the fuel oils, fell 11% on the week to 8.687 million barrels, the lowest since March 29.

Fuel oil demand for power generation usually picks up in summer in the Middle East as hot weather spurs increased air conditioning usage. But the bunker market has also strengthened lately, with Fujairah July sales rising 2.8% on the month to the highest in 2021.

More oil tankers have been calling at the port and buyers are asking for bigger volumes, according to traders. Montfort Trading FZE is entering the bunker market in Fujairah, effective Sept. 1, according to Mikkel Jacobsen, head of bunkering.

Middle distillates decline

There were 516 clean and dirty petroleum tankers that called in the Fujairah/Khor Fakkan port area from Aug 1. to Aug. 24, according to Platts cFlow trade-flow analytics software. This compares with 609 tankers visiting the Middle East port hub for all of July and 607 tankers for June, the data showed. For the dirty petroleum tankers alone, 276 vessels called from Aug. 1 to Aug. 24, compared with 328 for all of July and 326 for June.

Middle distillates, including jet fuel and diesel, declined 2.1% in the week to 3.96 million barrels as of Aug. 23, after a 35% rise in the previous week. Light distillates, including gasoline and naphtha, rose 0.5% to a four-week high of 5.631 million barrels.

Total stockpiles fell 23.9% in the past year, led by a 36.8% decline in heavy distillates. Light distillates are down 18.3% while middle distillates rose 16.8%.

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Source: Platts