Oil product stockpiles rebounded to a record high at the Port of Fujairah as of June 1, led by gains in heavy fuels used in marine and power industries.
The total stockpiles climbed 6.5% in the week ended June 1 to 30.71 million barrels, according to data released June 3 by the Fujairah Oil Industry Zone. The total has hit four all-time highs in the last five weeks, signaling the slump in gasoline demand to jet fuel and marine bunkers because of the coronavirus pandemic.
"The real demand is not there as of yet," a source in Fujairah told S&P Global Platts. "The demand for bunker fuel is also reduced, and that's a major factor because it's one of the key activities. Demand for storage is still there, but the contango has been reduced so it's not as attractive as it was a month ago."
Heavy distillates and residues, covering fuels used for marine bunkers and power generation, jumped 8% to a two-week high of 16.164 million barrels.
Light distillates such as gasoline increased 7% to 8.549 million barrels, the highest since June 17, 2019, and middle distillates such as jet fuel rose 2% to a fourth consecutive all-time high of 5.997 million barrels.
Middle distillates have jumped for 10 weeks in a row, more than tripling over the period. But the light distillates category has climbed the most this year, rising by 79%, while middle distillates are up 61% and heavy distillates are 60% higher.
Total stockpiles have ballooned 65% this year with more than six months left. That compares with a 7% gain for all of 2019, a 2.3% jump in 2018 and 12% drop in 2017.
Platts, the official publisher of the Fujairah oil products data, has been assessing gasoline cargoes FOB Fujairah since October 2016 and marine fuel 0.5% at the port since July 1, 2019. The International Marine Organization mandated burning of fuel with no more than 0.5% sulfur unless the vessel is fitted with a scrubber as of Jan. 1, 2020.
