May 22, 2020 – The volume of oil products held independently in storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and trading hub rose the past week, according to consultancy Insights Global.

Inventories of almost all surveyed products rose on the week to yesterday, with only fuel oil inventories down.

Fuel oil stocks on the week, amid a rise in export interest for the product in northwest Europe. The Suezmax tanker Leonid Loza departed the ARA region on 17 May with fuel oil, which it could deliver to Singapore, according to data from oil analytics firm Vortexa. And the very large crude carrier (VLCC) Amyntas also loaded from Rotterdam on 17 May, but is yet to declare its destination. Fuel oil cargoes also departed ARA for the Caribbean, where it could go into storage, potentially for local bunkering. Fuel oil was also spotted departing ARA tanks for a voyage to Saudi Arabia, where high-sulphur fuel oil is typically burned for power generation.

Gasoline stocks rose on the week, their highest since at least 2011. The stock build came even as export interest for northwest European gasoline increased, probably driven by continued contango structure, where prompt prices are weaker than those for future delivery, which is incentivising putting gasoline and blending components into storage. Gasoline cargoes departed ARA for typical export destinations the US and west Africa, but vessels were also heading for the Suez canal for voyages to Asia, including China. Transatlantic gasoline bookings have surged this month, as European exporters look to the US — where demand has shown signs of improvement — to clear supplies.

Independently-held gasoil stocks rose, their highest since October, as traders look to take advantage of the contango structure by putting product into tank. Gasoil entered ARA storage from India, Norway, Russia and Saudi Arabia this week, while outflows were recorded to the UK. The rise in inventories came even as gasoil flows up the Rhine to inland markets reached their highest weekly level since at least 2017, according to Insights Global data. Diesel in the inland truck market has traded premiums to ARA barge prices — up by around 18pc from January-February premiums — as German imports have remained robust in the face of low consumer demand.

Jet fuel inventories rose to their highest since May 2017. Jet fuel arrived at ARA from Saudi Arabia and the UAE principally, and departed for the UK. End-user jet kerosine demand remains extremely weak as a result of travel restrictions linked to the Covid-19 pandemic. Jet fuel could arrive in northwest Europe from east of Suez in May, which would be the highest this year, according to Argus tracking data.

Naphtha inventories rose on the week, as an Aframax tanker delivered the product from Algeria, in addition to inflows from Russia and the UK. No naphtha outflows were recorded, amid suggestions that naphtha demand from the petrochemical sector has been weak, leading to a reversal in the typical flow of naphtha up the Rhine to petrochemical units.

Reporter: Robert Harvey