Gasoil inventories bolster ARA product stocks
London, (Argus) — Rising stocks of gasoil offset falling inventories of all other oil products held independently in the Amsterdam-Rotterdam-Antwerp (ARA) region during the week to yesterday, according to consultancy Insights Global.
Gasoil inventories rose to their highest level since October after reaching nine-week lows the prior week. The increase was prompted by increasing quantities arriving from the Mideast Gulf thanks to ample supply both in the Gulf itself and in Singapore, another centre of demand. Tankers also arrived in the ARA area, Germany, Latvia, Poland, Russia, the US and the UK. Rising inflows helped push northwest European French-diesel margins to crude to 14-month lows during the week to 30 May, down on the week. Tankers departed the ARA area for Denmark, the UK and west Africa.
Stocks of all other surveyed products fell, with gasoline and naphtha both recording double-digit falls in percentage terms. Problems with contaminated Russian crude in central Europe continued to support northwest European gasoline prices. The front-month June Eurobob contract closed to the August contract on 30 May, against an average for May so far. At the same time sustained backwardation along the gasoline forward curve continued to discourage storage of the product.
Relatively firm northwest European gasoline prices attracted seaborne cargoes into the ARA area from France, Latvia, Norway, Portugal, Russia, Spain, Sweden and the UK. But gasoline barge flows up the river Rhine rose to four times their normal levels owing to the widespread refining issues, and tankers were also booked to carry product from the ARA into northern Germany. Tankers also departed for Cuba, the UK, the US and west Africa.
Naphtha stocks in the ARA region fell to their lowest level since November 2017 as a result of firm demand from gasoline blenders and low demand in the area for the paraffinic naphtha used by petrochemical end-users. Northwest European paraffinic naphtha’s discount to North Sea Dated crude reached its lowest level since November 2014 on 29 May, pushed down by petrochemical outages around the continent and ample supply in the key Asia-Pacific export region. Cargoes likely comprised mainly of gasoline-blending grade material arrived from Finland, France, Norway, Russia, Sweden and the UK.
Jet fuel inventories fell back from two-year highs recorded the prior week, with demand increasing in line with seasonal expectations. Rising demand was signified by an increase in bookings of barges to carry the product, with pipeline capacity no longer sufficient to move the necessary volumes around northwest Europe. Tankers arrived in the ARA area from China and Russia and none departed.
Fuel oil inventories ticked downwards on the week, with the arrival of cargoes from Poland and the US nearly offsetting the departure of the VLCC ADS Serenade on 23 May. Stocks of fuel oil in Singapore remain at two-year highs, reducing the incentive for European market participants to accumulate cargoes in the ARA area for onward transit onboard larger vessels.
Reporter: Thomas Warner