1 November, 2019 (Argus) – Lower distillate stocks resulted in decline in oil products in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub, according to the latest data from consultancy Insights Global.

Total oil product stocks now stand at their lowest since 9 May. Another sharp fall in gasoline inventories contributed to the fall, as they dropped in the week to 30 October — the lowest since September 2018. Stocks have been drawn down in the past two weeks, with firm export interest and the absence of significant restocking in the region. An open transatlantic arbitrage has resulted in tankers continuing to depart for the US and Latin America, as well as west Africa. Gasoline arrived from France, Russia and the UK, but steep backwardation in the Eurobob gasoline swaps market has deterred suppliers from restocking as long as possible.

US gasoline demand recently reached a seasonal high, according to yesterday’s EIA report for the week to 25 October, up from a year ago and higher than the five-year average for the week.

Market structure is also likely to have deterred the restocking of gasoil, which fell on the week. Strong inland demand and lower freight rates have led to an increase in departures to Germany, as well as to Denmark, the UK and the Mediterranean. Tankers arrived from the Baltic, Russia and the United Arab Emirates. A fall in temperatures in northwest Europe this week will have added to heating oil demand.

The arrival of two Aframax-sized vessels from Algeria contributed to a rise in naphtha stocks, the highest since June. Amid firm petrochemical demand in northwest Europe, cargoes arrived from Finland, France, Russia, the UK and west Africa. No tankers departed the region, as is normal at this time of year.

Two large tanker arrivals from the United Arab Emirates helped jet stocks to rise, outweighing departures from the ARA area to Ireland and the UK.

Fuel oil stocks edged higher for the second week. Volumes are likely to be increasing because of low-sulphur fuel oil demand ahead of the marine fuel sulphur cap from 1 January 2020. Tankers departed the region for Saudi Arabia and west Africa, and arrived from Russia.

Reporter: George King Cassell