Dubai — Stocks at the UAE port of Fujairah rose by 1.9% on the week to an eight-week high, led by gains in stocks of middle and heavy residues.
Total stocks at the port were 20.3492 million barrels, up from 20.110 million barrels the previous week, according todata released Wednesday by the Fujairah Oil Industry Zone.
Heavy residue product stocks were up 10.7% on week, rising by 1.218 million barrels to 12.580 million barrels, from 11.362 million barrels the previous week. With IMO 2020 guidelines implementation drawing closer, there was an increase in the volume of HSFO on offer, as traders put cargoes on the market looking to reduce stockpiles of high sulfur fuel. This has reduced backwardation in the HSFO market and narrowed the spread between the first and second month for the Arab Gulf swaps market.
Middle distillates residues were also up on the week by 3.2% -- a 69,000-barrel increase from the previous week to 2.229 million barrels. Despite the build in stocks, traders said demand for gasoil remained strong. Although there was lessbuying from Saudi Arabia, demand from Europe and Singapore was strong.
Related story: Fujairah data: Oil products stocks climb to 7-week high on heavy distillates
But light-end stocks fell 13.7% from the previous week to 5.683 million barrels. The market was supported by strong demand for gasoline east of Suez, driven by refinery maintenance in Asia and the Middle East throughout October.
S&P Global Platts is the official publisher of the oil product data. Fujairah has the Middle East's largest commercial storage capacity for refined products.
-- Miriam Malek, miriam.malek@spglobal.com
-- Edited by Jonathan Dart, jonathan.dart@spglobal.com