ARA oil product stocks drop from 2-year highs
20 June, 2019 (Argus) — Inventories of oil products independently held in the Amsterdam-Rotterdam-Antwerp (ARA) area have fallen in the past week, driven by a decline in stocks of gasoil, gasoline and naphtha.
Total oil product stocks in the ARA hub fell in the week to 19 June, according to consultancy Insights Global. In the previous week, stocks rose, the highest level since May 2017.
The week-on-week decrease was driven by a drop in gasoil stocks. But gasoil inventories remain comfortably above the year-to-date weekly.
Gasoil cargoes were imported to the ARA region from Russia, Saudi Arabia and the US in the week to 19 June, but shipments departed for France, the UK and west Africa. In the previous week, two Suezmaxes delivered gasoil to the ARA area from India, and one from the UAE.
Demand from eastern Germany has remained strong as a result of crude supply disruptions to refineries in that region. But this is set to ease. Russian crude flows through the Druzhba pipeline to Germany’s PCK Schwedt and Leuna refineries resumed on 17 June, although neither plant is yet operating at full capacity.
Gasoline inventories dipped by on the week, pushed lower by improved arbitrage economics for shipments to the Americas, as a result of sharply lower European barge prices, which fell to three-month lows this week. The Nymex front-month Rbob gasoline contract reached premium to prompt-loading Eurobob oxy barges on 18 June, its highest since the end of April.
Record US gasoline demand drove more European cargoes west — implied gasoline demand hit in the week to 14 June in the US, according to the latest EIA data, its highest since at least 1991 when records began.
Naphtha supplies held in ARA storage have fallen in the past week. Northwest European naphtha’s discount to crude has narrowed, amid firmer demand following the return to operation of major petrochemical facilities in Asia-Pacific, although cargo bookings on the route have been thin as of yet.
Jet fuel stocks in the ARA region rose in the week to 19 June, putting inventories at their highest since May 2017. The northwest European jet fuel market continues to be well supplied off the back of east of Suez shipments, particularly from the Mideast Gulf and India. Supplies are being pulled into the ARA area from further afield as demand in northwest Europe begins to pick up for the summer flying season and refinery shutdowns constrain European jet fuel production.
Fuel oil inventories were little changed on the week, gaining less. The Baltic Sunrise departed Rotterdam for Singapore with a fuel oil cargo on 14 June, but those supplies have been replaced by the arrival of Aframax tankers from other parts of northwest Europe and the Baltics.
Reporter: Robert Harvey