Fujairah light-end stocks surge 20% as Asia infections bite

London, (Quantum Commodity Intelligence) – Inventories of refined product light ends hit a six-week high of 6.1 million barrels in the seven days ending 17 May, as rising Covid-19 infections in southeast Asia and India curbed demand for gasoline, data from S&P Global Platts and FedCOM showed.

Stocks at the Middle Eastern hub reached 6.12 million barrels, up 1 million barrels, or 20%, in a week and the highest stock build since the middle of March, when much of Europe was curbing restrictions on travel to stem their own contagion.

The picture mirrored what was happening in in Singapore – another Asian storage hub - where light end stocks rose to a two-week high of 12.38 million.

The rise in stocks comes amid slumping gasoline cracks.

Front month refining margins for RON 92 gasoline slumped last week from $6.73/b on Monday to just $4.45/b after Japan, Singapore, Malaysia and Thailand moved to restrict movement as infections rise across the continent.

However, as bearish as the picture is, inventories in Fujairah are around 10% lower than the average so far this year and 25% lower than the 2019 average.

Elsewhere, stocks of residual fuels at the bunkering hub rose to 13.6 million barrels, up 500,000 barrels, or 4%, on the week.

While stocks are only at a two-week high, they remain 30% above the 2019 average and the market remains in contango, with cracks at their lowest in months.

Stocks of middle distillates such as jet and diesel fell 6.5% over the course of the week to 3.74 million barrels – around 50% higher than 2019 levels and about average so far this year.