ARA oil product inventories hit two-year highs
London, 13 June (Argus) — A second consecutive week-on-week rise in gasoline stocks pushed inventories of oil products independently held in the Amsterdam-Rotterdam-Antwerp (ARA) region to their highest since May 2017.
Total oil product stocks rose in the week to 12 June, with inventories of all surveyed products rising on the week. The share of utilised independent tank space in the ARA region has hit its highest in two-and-a-half years. Rising gasoline stocks accounted for an increase in overall utilisation recorded over the last fortnight.
Firmer northwest European barge prices, prompted by tighter supply in Germany, continued to draw large cargoes into the ARA region during the week. Record volumes of Argus eurobob oxy barges sold last week contributed to the rise in inventories, booked to load on a prompt basis. Refinery outages in Germany have bolstered demand from buyers along the Rhine.
Gasoil stocks rose to reach their highest since October 2018. German demand remained steady on the week, supported by lower output from the PCK Schwedt refinery and Total’s Leuna refinery. But production at the refineries is likely to increase in the coming weeks following the resumption of crude flows through the Druzhba pipeline. A weaker diesel market in Asia-Pacific pushed more tankers into Europe from east of Suez. Two Suezmaxes arrived from India, with a further tanker arriving from the UAE.
Jet fuel stocks in the ARA area rose to reach their highest since May 2017. Two tankers from the Mideast Gulf and South Korea — the Norddolphin and the Sti Nautilus — discharged in ARA in the week to yersterday. Local demand is likely to increase throughout June, and barge flows around the ARA area rose week-on-week.
Naphtha inventories in ARA rose to a four-week high. Demand from the northwest European petrochemical sector remained low as a result of scheduled maintenance at two ethylene crackers in the ARA region. Buying interest from gasoline blenders was also slow because of the high volumes of finished-grade gasoline arriving in the area. Blenders typically add naphtha to gasoline in order to reduce the viscosity of the finished product.
Northwest European naphtha’s discount to North Sea Dated crude remained at multi-year lows during the week to yesterday, owing to a significant supply overhang. But even greater surpluses in other key production regions continued to make northwest Europe an attractive destination for sellers. A cargo of heavy naphtha is expected to arrive later in the month from the US Gulf Coast, reflecting the high levels of supply across the Atlantic.
Reporter: Thomas Warner