Oil product reserves in the Fujairah region of the United Arab Emirates increased by 23% in the week ending October 26, 2023, reaching 8.914 million barrels. This level of reserves is the highest in the past five weeks. However, current reserves show a 57% decrease compared to February 23, which was before the outbreak of war in the Middle East.
Increase in Light Distillate Reserves
Light distillate reserves, which include gasoline and naphtha, rose by 49% to 1.942 million barrels. This increase marks the third consecutive rise since the record low of 559,000 barrels on October 5. This upward trend indicates high market demand for these types of fuels under current conditions.
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Changes in Heavy Distillate Reserves
Alongside light distillates, heavy distillate reserves, used as fuel for ships and for electricity generation, increased by 28% to 4.717 million barrels, also marking a three-week record. In contrast, middle distillate reserves, including jet fuel and diesel, remained relatively unchanged at 2.255 million barrels. This figure has remained stable after rising to 2.774 million barrels on October 12, which was the highest level since February 23.
In oil fuel markets, the backwardation structure has encouraged selling, and the costs of loading goods from warehouses are assessed to be high due to limited replenishment options. For example, the Fujairah 0.5%S marine fuel premium compared to the Singapore 0.5%S marine fuel benchmark decreased by 24% to $85.43 per metric ton in the week ending October 27, marking the lowest level in the past seven weeks. Additionally, the Fujairah 380 CST HSFO heavy fuel premium also decreased by 7.5% during the same period to $118.58 per ton, the lowest level since September 1.
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