Refined product stocks at the Middle Eastern hub of Fujairah sank by 7.1% to 20.027 million barrels in the week to Monday as middle distillate inventories fell to a three-month low, according to the Fujairah Energy Data Committee.
Middle distillate stocks saw the sharpest decline, losing 24.8% to 3.05 million barrels.
“Traders continue to focus on the open arbitrage for gasoil to the West,” S&P Global Platts Analytics wrote in a report Wednesday.
MR tanker freight rates have risen in the past few weeks partly because of an increase in middle distillate flows from the Arabian Gulf to Africa, according to the report.
Light distillate stocks slipped by 5.9% to 10.201 million barrels, dropping from last week’s record high but still at the second-highest level on record. Oversupply in the global gasoline market has led to negative crack spreads seen recently in Singapore and Europe, Platts Analytics said.
Stocks of heavy distillates and residue advanced on the week, gaining 1.7% to 6.776 million barrels. Fujairah bunker demand has started to increase this week and may be boosted further by the sharp drop in crude prices over the past two days, Platts Analytics said.
Platts holds exclusive rights to publish Fujairah oil inventory data, and has deployed a blockchain network for its collation.