Oil product stocks have reached new record levels at the United Arab Emirates (UAE)’s East Coast Port of Fujairah due to an increase in heavy fuels used in marine and power industries, according to WAM.
The total stockpiles increased by 6.5% in the week ending June 1 to 30.71 million barrels (mmbbl). This record level is the fourth all-time high in the last five weeks, and can be directly linked to the global slump in gasoline demand to jet fuel and marine bunkers.
Heavy distillates and residues, covering fuels used for marine bunkers and power generation, also jumped 8% to a two-week high of 16.164 mmbbl. Light distillates increased 7% to 8.549 mmbbl, and middle distillates grew 2% to a fourth consecutive all-time high of 5.997 mmbbl.
“The real demand is not there as of yet,” a source in Fujairah told S&P Global. “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.”
So far this year, total stockpiles have already increased 65% compared with 2019.