Product Stocks See Longest Decline in Months: Fujairah

Oil product inventories at Fujairah in the UAE dropped for a fourth consecutive week, the longest stretch since the record slide in October 2020, as middle distillates slumped to an 11-week low and heavy distillates declined for the first time in three weeks. Total stockpiles on Jan. 11 stood at 22.122 million barrels, down 5.3% from a week earlier and the lowest since Nov. 30, according to Fujairah Oil Industry Zone data provided exclusively to S&P Global Platts on Jan. 13.

Stocks are down 10% in the past four weeks, led by a 27% drop in middle distillates such as gasoil, diesel, jet fuel and kerosene. Middle distillates on Jan. 11 stood at 4.4 million barrels, down 2% from a week earlier and the lowest since Oct. 26, 2020. They have dropped for five weeks in a row, the longest stretch since the data series began in January 2017.

There were 272,000 barrels of gasoil destined for Sudan from Fujairah in the week started Jan. 4, the first such shipment in a year, according to data analytics firm Kpler. The rebound is good news for middle distillates, the hardest hit product category in 2020 when stocks averaged 77% higher than in 2019 as the pandemic crippled demand for jet fuel.

Inventories of heavy distillates covering fuel oil for power generation and marine bunkers dropped 11% in the week to Jan. 11 to 10.38 million barrels, the lowest since Dec. 7, 2020. Malaysia has been taking fuel oils from Fujairah for the past four weeks, and Sri Lanka returned as a destination country in the week started Jan. 4, according to Kpler. Light distillates stocks stood at 7.342 million barrels as of Jan. 11, up 1% from a week earlier.