May 28, 2020 — The amount of oil products held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) area rose during the past week to reac the highest level since at least 2003, according to consultancy Insights Global.

Inventories of almost all surveyed products rose on the week, supported by the crude market’s steep contango structure, where prompt prices are at a discount to forward values. The tank utilisation rate in ARA was between 70-75pc, but the 25-30pc not in direct use was unavailable to the market. Available commercial tank space in the area appears very limited until well into 2021.

Gasoline stocks bucked the trend, falling during the past week, driven by a rise in local demand and a week-on-week increase in arbitrage flows to the US and west Africa. Demand for gasoline in the US is rising ahead of the summer driving season. Gasoline cargoes also departed ARA for Puerto Rico, and arrived in the area from France, Italy, Spain and the UK.

Stocks of all other products rose, with naphtha and jet fuel both reaching their highest level since at least 2003. Jet fuel barge movements around the ARA area ticked up from a very low base, but demand from inland destinations along the river Rhine remained virtually non-existant.

Several European airlines have announced plans to increase passenger flights next month as travel restrictions brought in to tackle the Covid-19 pandemic are eased. But a global surplus of jet fuel means that market participants are still looking for floating storage for the product. Tankers carrying jet fuel arrived in the ARA area from the Mideast Gulf, South Korea and from Augusta in Italy during the past week, while one tanker departed the region for the UK.

Naphtha inventories rose on the week. Demand from petrochemical plants along the river Rhine was low, with prices of rival feedstocks becoming more competitive. And high gasoline inventories meant that there was little interest from gasoline blenders either.

Gasoil stocks rose on the week, the highest level since October last year, as traders looked to take advantage of a contango structure in Ice gasoil futures by putting product into storage. Gasoil flows up the Rhine to inland markets reached their highest weekly level since at least 2017 a week earlier, but fell back during the past week as stocks inland also approached storage capacity. Gasoil tankers departed ARA for the UK and west Africa, and arrived from the Mediterranean, Poland, Russia and Saudi Arabia.

Fuel oil stocks rose slightly. Demand in the ARA area for bunker fuels remained stable at a very low level, weighed down by the impact of Covid-19 on commercial shipping. Fuel oil cargoes arrived in ARA from the Black Sea, France, Germany and Russia, and departed for the Mediterranean and Port Said for orders.

Reporter: Thomas Warner