Fujairah Weekly Oil Inventory Data Stocks Level as of Oct. 9, 2017

Oil product stocks dip 3% week on week to 16.014 Million Barrels

Chart Attribute: Fujairah Weekly Oil Inventory Data (as of October 9, 2017) / Source: The Gulf Intelligence

Fujairah's commercial stocks of refined oil products fell to a new low of 16.014 million barrels in the week to Monday, down 3% due to continued draws on heavy distillates and residues, according to S&P Global Platts Analytics.

Stocks of heavy distillates and residues fell 8.4% week on week to 8.5 million barrels, the lowest level since February, and second lowest total since stock records started being published in January, data released Wednesday by the Fujairah Energy Data Committee (FEDCom) showed.

Heavy distillates and residues account for more than half the total oil products stored in Fujairah. These stocks have now fallen 27%, or 3.17 million barrels, over the past two weeks, with outflows of fuel oil cargoes within the Persian Gulf region, as well regular shipments to Pakistan. That has been in addition to strong demand from Singapore, which has pulled Middle Eastern barrels towards Asia.

Last week saw the spread between benchmark Singapore 380 CST and Arab Gulf 180 CST rose to the highest level since March. Platts Analytics estimated fuel oil exports from Iran, the region's largest net exporter, at 1.5 million mt in September, with shipments expected to decline to around 1.1 million mt in October as the country's electricity demand rises.

In addition, Iran's domestic power sector has been using more fuel oil due to gas shortages related to ongoing maintenance at the South Pars fields. Light distillate stocks fell 4.3% to 4.554 million barrels, well below the 4.9 million barrel average since the beginning of the year. That was despite balanced fundamentals in the gasoline market in Europe, Asia, and the Middle East, after prices saw a post-Harvey correction.

At the same time, the east of Suez market had pockets of strong gasoline demand, in particular from Iran, Pakistan, Sri Lanka, Vietnam, and Indonesia. First-month/second-month Arab Gulf gasoline 95 swaps fell to a three-month low last week, but have since steadied to be at 65 cents/b Tuesday.

Chart Attribute: Fujairah Weekly Oil Inventory Data (Jan 9 - Oct 4, 2017) / Source: The Gulf Intelligence

MIDDLE DISTILLATES STOCKS RISE

Middle distillate stocks stood out this week, rising 19.5% to 2.957 million barrels, but remained below the 3 million b/d for the fourth week in a row due to the open arbitrage which has drawn gasoil from the Middle East and India to Europe.

The east-west gasoil exchange of futures for swaps was at a near four-week high of minus $20.55/mt Tuesday. While that indicated that arbitrage economics were still workable, rising freight rates and higher US distillate production meant the economics were getting tighter. US Gulf Coast refineries have now largely recovered from recent disruptions, with latest weekly data showing total US distillate production at 4.93 million b/d -- up 216,000 b/d year on year.

About the S&P Global Platts and FOIZ Fujairah Data Project

The government of Fujairah in 2016 announced a plan to publish weekly data on refined products held at onshore commercial terminals at Fujairah as part of its effort to position the Indian Ocean port as a global oil trading and storage. It appointed S&P Global Platts to distribute the weekly inventory data. FEDCom was established by the Fujairah Oil Industry Zone to collect, verify and distribute inventory data to replicate the data sets provided at other global trading centers such as Singapore and Rotterdam.Fujairah has about 41.5 million barrels of commercial oil product land storage available for leasing.

About The Gulf Intelligence

Gulf Intelligence is a strategic communications & research firm effective across the full value-chain of the Middle East Energy Sector – we facilitate knowledge exchange and advance the business interests of national and international stakeholders operational in the regional industry.