ARA Oil Product Stocks Fall

13 March, 2020 (Argus) – The total volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) area fell during the week to 12 March, according to the latest data from consultancy Insights Global.

Overall oil products stocks fell by on the week. The drop came as a sharp rise in fuel oil stocks was offset by falls in middle distillate and gasoline inventories. The storage market and inventory levels began to show the first signs of being affected by recent oil product price volatility and coronavirus fears.

Independently-held fuel oil stocks in ARA rose on the week according to Insights Global, reaching their highest since September 2019 on falling demand from the bunkering sector. Falling economic activity is weighing on bunker fuel prices, with the fuel used to power the world’s cargo ships and oil tankers. Prices in the world’s largest bunkering hub Singapore fell to [multi-year lows]on 10 March on lower underlying crude prices and fears over an economic slowdown.

Jet fuel inventories in northwest Europe reached their lowest since September 2014 in contrast, falling on the week. Demand for flights has [fallen precipitously]since the coronavirus outbreak, causing some market participants to speculate that cargoes arriving in Europe may be blended into the diesel pool. But enquiries for jet fuel storage tanks appeared to rise sharply, as low prompt demand brings the market structure into contango.

There was a similar increase in enquiries for gasoil storage, with the expiry of the Ice March gasoil today leaving the forward curve in contango through to the summer. But actual stored volumes fell by nearly 11pc on the week, amid firm demand from France and from along the river Rhine. Tankers departed the ARA for Le Havre and the UK, and arrived from Russia and the Baltics.

Gasoline inventories fell amid a rise in transatlantic outflows. Bookings on the route from northwest Europe to north America have been in recent weeks but many loadings were affected by bottlenecks, especially around Amsterdam. The backlog cleared during the week to yesterday, although some unloading delays were heard to be affecting barges carrying gasoline blending components. Demand from across the Atlantic was also supported by the switch to summer grade gasoline in the US, which typically bolsters exports from Europe. Tankers arrived in the ARA from Finland, France, Russia and the UK.

Naphtha stocks rose, supported by weak demand from users along the Rhine. At least one petrochemical complex in northwest Germany was preparing for a maintenance turnaround, reducing overall demand in the area. And more competitive prices of rival feedstocks also weighed on interest from those end-users with flexible feedstock slates. Tankers arrived from Algeria, Norway, Russia and the UK, while none departed.

Reporter: Thomas Warner