September 03, 2020 -Oil products held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub fell this week, the lowest total recorded since 30 April.

Overall oil product inventories continued to fall back from the 17-year highs in mid-June. Stocks rose sharply following the onset of the Covid-19 pandemic as demand particularly for fuels fell heavily, but have since fallen gradually to the four-month lows recorded during the week to yesterday.

Stocks of gasoil, fuel oil and naphtha all fell week on week, while gasoline inventories rose and jet fuel inventories jumped. The Suezmax Dong a Thetis loaded a jet fuel cargo in Rotterdam the previous week, which brought jet inventories to their lowest since mid-May. But the arrival of tankers from South Korea, India and Saudi Arabia brought stocks straight back up to a level close to the three-month average.

Gasoline stocks rose for a second consecutive week, supported by the arrival into the ARA of cargoes that had been held in floating storage on the North Sea. Cargoes also arrived from France and the UK. Outflows to key arbitrage destinations the US and west Africa rose on the week, and tankers also departed for Canada and Mexico.

Stocks of all other products fell. Gasoil inventories fell back from five-week highs, despite flows of diesel from the ARA area up the river Rhine falling again to reach their lowest since at least November 2017, when Insights Global began tracking the relevant data. Low Rhine water levels had inhibited barge journeys inland in recent weeks. But a temporary rise in water levels did little to stimulate inland flows, with middle distillates in the European hinterland still high. Gasoil tankers arrived in the ARA region from Russia and departed for the UK.

Flows of naphtha up the Rhine fell sharply on the week, owing to a fall in demand from petrochemical end-users. The main buyers are well covered in the short term, reducing the incentive for them to bring more naphtha inland. And demand from around the area for naphtha as a gasoline blending component remains low as a result of the northwest European surplus of finished grade gasoline. Naphtha cargoes arrived from Algeria and Russia, while none departed.

Fuel oil stocks fell to reach their lowest since the week to 5 March. Demand for bunker fuels has been generally low since the beginning of the pandemic, and there was little sign of a sudden increase in demand over the past week. Outflows to west Africa rose on the week, and tankers arrived from Denmark, Poland, the UK and the Caribbean. Fuel oil demand in the Caribbean is probably suffering from the impact of Covid-19 on the cruise industry.

Reporter: Thomas Warner