FUJAIRAH DATA: Oil product stocks fall to six-week low on higher summer demand
7th July 2021 07:57 GMT

 

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.

Temperatures are rising throughout the Middle East, leading to increased demand of 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.

Heavy distillates inventories were down 33% from this time last year, according to the FOIZ data provided exclusively to Platts. Stockpiles may continue to decline after Pakistan State Oil bought 65,000 mt of 180 CST high sulfur fuel oil, with maximum 3.5% sulfur from Vitol for delivery to Port Qasim over July 21-29 at a premium of $52.28/mt to the Mean of Platts Arab Gulf 180 CST HSFO assessments, CFR, Platts reported earlier.

Light distillates stock, including gasoline and naphtha, stood at 6.469 million barrels as of July 5, down 11% from a week earlier and a two-week low, according to the FOIZ data.

Middle distillates stock, including jet fuel and diesel, stood at 3.656 million barrels as of July 5, down 7.3% from a week earlier and a one-month low. Compared with a year ago, light distillates were down 18% and middle distillates dropped 11%.


Bunkerworld ,
7th July 2021 07:57 GMT