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

Overall oil product stocks increased on the week, with inventories of most products rising as a result of falling economic activity around the continent driven by the coronavirus pandemic. Jet, naphtha and fuel oil inventories all rose on the week. But gasoil inventories fell owing to strong demand from inland buyers, and gasoline stocks dropped on rising transatlantic exports.

Naphtha stocks increased to reach their highest level since August 2018, with demand for the product as a gasoline blending component virtually non-existent over the last week. Naphtha reached a rare premium to gasoline, making gasoline production uneconomical.

Plummeting gasoline demand in northwest European brought refining margins earlier this week to their lowest level since Argus records began. The low European prices supported transatlantic arbitrage economics, and gasoline tankers departed ARA for Mexico, Puerto Rico and the US, as well as for west Africa, the Mediterranean and Brazil.

Gasoil inventories fell heavily over the past week, as market participants in the European hinterland took the opportunity to refill their storage tanks. Contango in the gasoil forward curve also supported restocking. Barge flows up the Rhine into Switzerland, Germany and France all rose as a result. And gasoil cargoes departed the ARA area for Argentina, France and Ireland.

Jet fuel inventories in northwest Europe rose to reach five-week highs, with demand from airlines falling further with each passing day. No jet cargoes arrived or departed, suggesting that local production is swelling inventories in the absence of demand from nearby airports.

Fuel oil stocks rose over the past week amid an anticipated slowdown in demand for bunker fuels. Tankers carrying fuel oil arrived from France, Poland, Russia and the UK and departed for the Mediterranean and west Africa.

Reporter: Thomas Warner