August 11, 2020 — Total oil products held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) trading hub have risen in the past week, after reaching three-month lows a week earlier.

The gradual recovery in northwest European oil product demand since the height of the Covid-19 pandemic has generally reduced the incentive for market participants to store product in tanks. But overall inventories rose very slightly during the week to yesterday, mainly as a result of a fuel oil stockbuild.

Fuel oil stocks rose after reaching their lowest since 12 March the previous week. MR tankers departed for the Mediterranean and west Africa, but the outgoing volume was outweighed by the arrival of cargoes from Sweden, Poland, Latvia, Estonia and Germany. Very low sulphur fuel oil arrived in Rotterdam on board the Maersk Tampa, having departed from Wilhelmshaven in late July according to Vortexa. Rotterdam-based HES International restarted the vacuum distillation unit (VDU) at its mothballed 260,000 b/d Wilhelmshaven refinery in June in order to produce IMO 2020-compliant marine fuels.

ARA gasoil stocks fell on that week. Tankers departed for France, Germany and the UK, and arrived from Russia and the US, but high inventories at destinations along the Rhine continued to inhibit barge bookings from the ARA area to terminals inland. Barge flows from ARA to upper Rhine destinations fell to their lowest level since November 2018 as a result. Inflows from Russia will remain at a low level during August.

Gasoline inventories in ARA fell. The volume departing for west Africa rose on the week, and tankers also left the area for Canada, the Caribbean and the US. Tankers arrived from Finland, Portugal, Spain, the UK and the North Sea where tankers are being used for floating storage. Northwest European gasoline refining margins fell below zero on 3 August — the first time gasoline has been assessed below North Sea Dated crude in August since at least 2009. The consequent lack of blending activity meant that demand for barges to carry blending components around the ARA was virtually nil.

Jet fuel inventories rose, returning close to fresh all-time highs. Demand from the aviation sector remained low. Two small cargoes departed the area for the UK and a part-cargo arrived from Singapore.

Naphtha inventories rose. The volume of naphtha departing the ARA area for inland Rhine destinations ticked down for the second consecutive week, and demand from gasoline blenders was virtually non-existent. Naphtha cargoes arrived from Finland, Norway and Russia.

By Thomas Warner