Fuel oil stocks in ARA up 12.6%, naphtha stocks drop 32%

London (Quantum Commodity Intelligence) - Fuel oil stocks in ARA were up 12.6% this week, sources said, citing data from Insights Global, following the hefty gains in Singapore and Fujairah.

Fuel oil stocks held in independent tanks in the ARA trading hub rose to 1.374 million mt over the week to June 3, up 154,000 mt from a week earlier.

Inventories of residual stocks in Singapore were up 12% over the week to June 2, while stocks in Fujairah were up 23% over the week to May 31, some 40% above average levels in 2019.

But the stock builds in the key bunkering hubs have failed to derail the trajectory of fuel oil cracks in Europe and Asia, which have been heading north over the last two weeks, partly correcting the long slide down in crack values from mid-March to late May.

Cracks for HSFO barges in ARA were pegged at -$10.85/mt Thursday, around the same level seen mid-May, but still remain sharply down on the heights seen in mid-March when they were as high as -$7.30/b, Quantum data shows.

The cautious approach adopted by OPEC+ in releasing more sour crude supplies, as well as the dampening down of the prospect of fresh Iranian barrels, has supported cracks recently.

In other ARA products, naphtha stocks fell sharply, down to 217,000 mt from 323,000 mt a week earlier, a sharp fall of 32.8%.

After recovering from a dip in mid-May, cracks for naphtha cargoes in northwest Europe have remained steady over the last three weeks, holding ground between -$0.75/b and -$1.85/b versus Brent.

Gasoline stocks were little changed, rising to 1.187 million mt, up 18,000 mt week-on-week.

Diesel and gasoil stocks were up 4.6% over the week to June 3, rising to 2.305 million mt, up 102,000 mt week-on-week.

Jet stocks in ARA fell slightly, dropping 38,000 mt to 1.14 million mt.