Dubai — Jet fuel and other middle distillate stockpiles at the Middle Eastern oil hub of Fujairah in the UAE jumped 5% over the past week to a new high as of Monday, marking the ninth consecutive weekly advance, with inventories more than tripling since the coronavirus pandemic decimated air travel in the region starting in late March.
Total stockpiles -- covering light distillates, middle distillates, and heavy distillates and residues -- dropped 4.7% over the week to 28.831 million barrels on Monday, according to data released Wednesday by the Fujairah Oil Industry Zone. It is the first decline in five weeks after hitting new highs for three consecutive weeks.
Middle distillates stockpiles have been climbing since late March, when India embarked on a nationwide lockdown and the UAE suspended passenger flights, except for emergency evacuation and cargo flights. Both Dubai-based Emirates and Etihad in Abu Dhabi have since resumed some passenger flights. Middle distillates also include gasoil, diesel, marine gasoil and kerosene.
"Gasoil markets have rebounded from the lows seen earlier this month but have struggled to build further momentum amid weak demand and heavy Chinese exports," S&P Global Platts Analytics said Wednesday in a report. "Gasoil surpluses in Asia and the Middle East could persist even as demand recovers due to a lack of arbitrage to send volumes to Europe."
Market sources have previously told Platts that pandemic concerns have boosted the use of private transportation over mass transit, which has led to a rise in traffic congestion in China and higher demand for gasoline and its related blending components. Naphtha and its downstream products mixed xylenes and toluene are used for blending in gasoline.
Inventories of light distillates, such as gasoline, naphtha and blending components, slipped by 3% to 7.961 million barrels, the first drop in three weeks. Much of the Middle East was celebrating Eid al-Fitr in recent days, marking the end of the month-long Ramadan.
"Gasoline demand in the Middle East and Muslim-majority countries in Asia typically sees a boost around Eid festivities, but the impact has been dampened due to coronavirus," Platts Analytics said.
Heavy distillates, including fuel used for marine bunkers and for power generation, declined 9% to 15.001 million barrels, a two-week low. The air-conditioning season is in full swing in the Middle East, boosting demand for fuel for power generation. Delivered prices for 0.5% sulfur marine fuel in Fujairah rose above Singapore for the first time in about six weeks, according to Platts data.
"Demand in both ports was reported as sluggish recently as rising crude prices and ample supply kept buyers on the sidelines," Platts Analytics said.
Platts is the official publisher of the oil product data for Fujairah, which has the Middle East's largest commercial storage capacity for refined products.