Fujairah Weekly Oil Inventory Data Stocks Level as of Sept. 4, 2017

Oil product stocks up 2.5% week on weekat 19.816 Million Barrels

Chart Attribute: Fujairah Weekly Oil Inventory Data (as of Sep 4 2017) / Source: The Gulf Intelligence

Fujairah's commercial stocks of refined oil products rose 2.5% to 19.816 million barrels in the week to Monday, remaining below 20 million barrels for a second week since large-scale refinery shut-downs in Texas related to Hurricane Harvey sent shock waves through global markets for oil products.

Total stocks at the UAE Arabian Sea port were buoyed by a 540,000 barrels build in combined stocks of light and middle distillates, data released Wednesday by the Fujairah Energy Data Committee showed. Meanwhile, heavy distillate and residue stocks, which make up more than half of total Fujairah oil product stocks, dipped 53,000 barrels, with stocks remaining broadly flat for a second consecutive week.

Stocks of light distillates, predominantly gasoline and naphtha, rose 5.3% to 5.68 million barrels from a 10-week low of 5.394 million barrels the previous week when they had fallen 1.393 million barrels, or 20.5% -- the largest weekly drop in terms of volume and the second largest as a percentage, since S&P Global Platts started tracking Fujairah stock data in January. Trading sources last week cited naphtha volumes headed for Asia as petrochemicals feedstock as the main driver for the large draw in the week ended August 28, which nonetheless also followed hard on the heels of the emergency shutdown of about 25% of US Gulf Coast refining capacity due to heavy floods in Texas and Louisiana after Harvey made landfall.

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

HARVEY EFFECT RECEDES

This past week, while there was little apparent reason for Asian demand for naphtha to take a sudden downturn, the European gasoline draw across the Atlantic to meet hurricane-related US shortfalls had started to ease. US Gulf Coast refineries and ports were in the process of returning to service while Colonial Pipeline, the largest US refined products pipeline and which had also been closed due to floods, resumed operations from Houston.

In the east of Suez market, planned refinery maintenance in Indonesia was further supporting Asian demand for light distillates, while differentials between Mean of Platts Singapore (MOPS) and Free On Board (FOB) Fujairah gasoline prices were little changed over the week. Fujairah stocks of middle distillates rose 8.1% to 3.402 million barrels, despite supply disruption of gasoil cargoes from the US Gulf Coast to Northwest Europe and the Mediterranean due to Harvey resulting in lower than average stock levels in the Amsterdam-Rotterdam-Antwerp region. However, high freight rates to move cargoes to Europe from the Middle East were keeping a lid on trade flow between the two regions. At the same time, rising gasoil outflows from India, which have exacerbated the supply overhang in the Asian market amid the current low demand during the monsoon season, may have contributed to the build in Fujairah middle distillate stocks. In Singapore, middle distillate stocks have also risen, reaching a three-month high of 13.768 million barrels last week.

FUJAIRAH BUNKERS DISCOUNTED VERSUS SINGAPORE

Fujairah's stocks of heavy distillates and residues totaled 10.734 million barrels on Monday, down 0.5% week on week. Demand for bunker fuel in both Fujairah and Singapore has been healthy over the past week. Prices for Fujairah 380 CST delivered bunker fuel, however, slipped to a discount to Singapore last week. It traded at a discount of about $4/mt, down from a $1.25/mt premium the previous week and from $2-$3/mt the week before that. The first-month/second-month backwardated structure for Arab Gulf 180 CST high sulfur fuel oil swaps widened further to an eight-week high of $1.50/mt from $1/mt in the previous week as increasing volumes were shipped to Singapore from the Middle East. 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 hub.

It appointed 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, S&P Global Platts Analytics estimates.

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.

Copyright © 2017 Gulf Intelligence, All rights reserved

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.