Oilmarket Blog

ARA stocks down, led by fuel oil

Gepubliceerd Jacob on 19 oktober 2017 17:34:03

London, 19 October (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region fell by 3.1pc on the week to 5.51mn t today, reflecting a drop in fuel oil inventory, according to consultancy PJK.

Fuel oil stocks fell by more than 200,000t in the week to 19 October, reflecting a combination of steady exports to the Asia-Pacific region and lower inflows. The Olympic Leader — a very large crude carrier (VLCC) chartered by Socar — sailed to Singapore earlier this week. Meanwhile, imports from France, Latvia, Poland and the UK failed to make up for a lull in Russian inflows.

Jet inventories firmed by 8.1pc on the week as three long-range tankers offloaded cargoes from South Korea and the United Arab Emirates (UAE). Two of these ships — the Yang Li Hu chartered by China Aviation Oil and the Front Pumachartered by Total — saw their 90,000t cargoes taken into account this week despite arriving at Rotterdam on 8 October.

Naphtha stocks declined by 4.6pc on the week as lower import volumes failed to meet substantial demand from the cracking pool. While product came from Germany, Norway, Spain and the UK this week, inflows from Algeria and Russia — two major suppliers of naphtha to the ARA region — grind to a halt. Buying interests from petrochemical end-users remained strong on the back of a narrow naphtha-propane spread. Considerable volumes of naphtha were also shipped to customers along the Rhine this week despite worsening loading conditions on the river. In recent days, barges could only be loaded up to 60pc south of the Kaub bottleneck — the gateway to southwestern Germany and Switzerland.

Gasoline inventories edged 1.3pc up this week as higher import and export volumes largely balanced each other. Growing outflows to Asia-Pacific — including China and Pakistan — and the Mideast Gulf more than offset a dip in US-bound export volumes. PJK described outflows to west African countries, including Guinea, as average. Product was also shipped to Canada and the UK and imported from France, Italy, Spain, Sweden and the UK. Meanwhile, exports from the Baltic, the Mediterranean and northwest Europe exhibited a downward trend, according to fixtures list compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options for loading during 12-18 October fell to 260,000t, down from 370,000t for loading in the previous week, while spot tanker bookings of European gasoline with west African discharge options collapsed to 74,000t, down from 312,000t for loading in the previous week.

Gasoil stocks remained broadly unchanged on the week. Lower import volumes came from Estonia, Finland and Russia this week. Meanwhile, cargoes were shipped to France and the UK, lifting weekly export volumes within their long-term average range. PJK said demand from the hinterland was subdued this week.

Argus reporter: Benoit Petre

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What Drives Tank Storage Demand? Arbitrage!

Gepubliceerd Jacob on 16 oktober 2017 14:30:11

Geographical price differences will lead to increased trade! In this article we would like to highlight the subject arbitrage and what this theme has for impact on the tank storage market.

Introduction to Arbitrage Economics
In theory (Investopedia), arbitrage is the simultaneous purchase and sale of an asset to profit from a difference in the price. It is a trade that profits by exploiting the price differences of identical or similar positions on different markets or in different forms. Arbitrage exists as a result of market inefficiencies.

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But how does this work in practice? As commodity trading firm Trafigura describes on their website, they apply three forms of physical arbitrage:

  • Geographical arbitrage identifies temporary price anomalies between different locations;
  • Time arbitrage seeks to benefit from the shape of the forward curve for physical delivery (see our article on market structure); and
  • Technical arbitrage seeks to benefit from the different pricing perceptions for particular commodity grades and specifications.

In this article and to make things clear we will focus solely on geographical arbitrage and in particular the Northwest European Singapore arb for heavy fuel oil.

In order to calculate heavy fuel oil’s price difference between Northwest Europe or ARA and Singapore, we compare the FOB ARA spot price with FOB Singapore swap price, second month due to the duration of the voyage. The difference between these values is the spread and should be large enough to cover the trade costs.

On most occasions heavy fuel oil is shipped to Singapore in a VLCC (Very Large Crude Carrier/310 kt DWT) and loads approximately 270 kt of product. We therefore sum the VLCC freight rate, finance costs, port costs, inspection costs and demurrage to come to total trade costs. Should the spread be more than the trade costs the arb between both regions is open. When the spread is less than the trade costs the arbs is closed.

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Importance of arbitrage to tank storage companies
From historical analysis we have learned that in the period between 1 January 2016 till 31 May 2017, 68% of the VLCC’s left for Singapore when the arb was open. 32% of the VLCC’s still undertook the voyage to Singapore when the arb was closed. So monitoring if arbs are open (or closed) is a good indication, to understand if trade between two regions is likely to increase. A positive trading environment, ultimately will influence tank storage dynamics.

Please note that arbitrage cannot be seen as a single indicator for business opportunities for tank storage companies. Other indicators that should be taken into account are: price volatility, market structure, and more. These subjects have been highlighted in other articles.

Source: www.trafigura.com.

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Lower naphtha, jet offset higher ARA fuel oil stocks

Gepubliceerd Jacob on 12 oktober 2017 17:06:17

London, 12 October (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region edged 0.3pc up on the week to 5.68mn t today, as weekly fluctuations of naphtha, jet and fuel oil inventories largely cancelled each other out, according to consultancy PJK.

Fuel oil stocks firmed by 5.1pc in the week to 12 October on the back of above-average inflows from the Baltic and Northwest Europe. Product came from France, Lithuania, Poland and the UK. Export cargoes leaving the ARA region on 6-12 January were limited to a single very large crude carrier (VLCC) heading to Singapore.

Naphtha inventory dropped by 11.2pc on the week, reflecting a combination of buoyant demand from petrochemicals end-users and decent buying interest from the blending pool. Rival propane feedstock has been trading at a premium to naphtha for most of the past three weeks in Europe, despite yielding smaller amount of high-value co-products per tonne of ethylene. This has incentivised European crackers to maximise the share of naphtha in their feedstock slates. On the supply-side, product came from Algeria, Russia, Portugal and Spain. MR-sized cargoes from the US Gulf coast also arrived at Gunvor’s 115,000 b/d Antwerp refinery — a facility that is not covered by PJK’s data — on 10 October. US Gulf coast to ARA arbitrage was unheard of until recently, but a combination of weak gasoline demand in the US with brisk cracking demand in Europe gave momentum to this unlikely trading route. More naphtha cargoes from the US Gulf coast are expected to reach the ARA region in the coming weeks, according to tracking data compiled by Argus.

Jet fuel stocks held independently in the ARA region fell by 29,000t to 643,000t. But two ships carrying 90,000t from South Korea arrived into Rotterdam on 8 October were not included in this week’s calculation, as the vessels offloaded after storage volumes were recorded, PJK said. The vessels were the Yang Li Hu, chartered by China Aviation Oil, and the Front Puma, chartered by Total. Jet fuel supply in northwest Europe is ample, with at least 670,000t arriving into northwest European ports from the Mideast Gulf and Asia so far this month. Demand in northwest Europe is weakening as the peak summer flying season draws to a close.

Gasoline inventory edged 0.8pc up during 5-12 October. Total export volumes were average as higher outflows to the Middle East balanced slightly below-average exports to other foreign markets, including Canada, China, Guinea, the US, Togo and elsewhere in west Africa. Imports — which came from Germany, France and the UK — were slightly below their long-term average. Exports from the Baltic, the Mediterranean and northwest Europe exhibited mixed patterns, according to fixtures list compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options for loading during 5-11 October fell to 222,000t, down from 333,000t for loading in the previous week, while spot tanker bookings of European gasoline with west African discharge options for loading during 5-11 October fell to 208,000t, down from 363,000t for loading in the previous week.

Gasoil stocks held steady on the week as larger import volumes from India and Russia made up for the adverse impact of ongoing maintenances on regional production. Shell is currently carrying out major maintenance at its 420,000 b/d Pernis refinery. Meanwhile, it remains unclear whether production at BP’s 400,000 b/d Rotterdam refinery has resumed following the beginning of a maintenance programme on 4 September. Product was imported from Estonia, India, Russia and the US and was shipped to the UK and west Africa. Demand from customers along the Rhine was said to be weak despite favourable loading conditions on the river.

Argus reporter: Benoit Petre

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What Drives Tank Storage Demand? Market Structure

Gepubliceerd Jacob on 9 oktober 2017 14:30:02

The market structure stimulates traders to buy now and sell late. In this article we would like to highlight the themes contango and backwardation and what market structure means for tank storage operators.

Introduction contango and backwardation
An oil price for immediate delivery is called spot price or cash price while an oil price for delivery at a specified date in the future is called a forward price. When we plot these various prices and order them from short to long term delivery, a forward curve is created.

When a futures price (second month) is below a futures spot price (first or front month), the market structure is in backwardation. In this case, the forward curve is downward sloping. When the futures spot price is below the futures price, the market structure is known as contango. In this case, the forward curve is upward sloping.

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A contango usually occurs when supply is higher relative to demand (supply glut) while in a backwardation demand is higher relative to supply (shortage). As time evolves, an oil forward curve can switch from backwardation into contango as in the case of the NYMEX RBOB futures forward curve (see: figure 2). When a cyclical pattern is visible, this is called seasonality. With respect to NYMEX RBOB futures, US gasoline prices tend to rise towards summer driving season during the period June and September. In the period before peak demand, oil traders tend to buy and store products to have product available in times of high consumption.

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Importance of market structure to tank storage companies
In a period of contango, oil traders are encouraged to buy oil products today and sell in the future when the spread between two months covers storage, shipping and finance costs. When this opportunity presents itself, product is being sold, shipped and stored, resulting in more business for tank storage companies. This play is known as a ‘contango storage play’ but is limited by the maximum tank storage capacity available.

In some rare occasions, when the time spread is large enough even tanker vessels are chartered by trading companies to store oil products. This is known as floating storage. In this rare environment demand for tank storage is high and pushes storage rates for spot availability. Backwardation discourages storing oil products as a trader can sell oil today at a better price than in the future.

Is market structure the only business opportunity indicator for tank storage companies?
There are other indicators that should be taken into account such as price volatility, arbitrage and more. These topics and PJK’s market model will be covered in upcoming weeks.

Learn what drives tank storage demand. Join the FREE Webinar: PJK Tank Terminal Commercial Performance Model upcoming October 30th 2017.

Source: Morgan, D., Oil 101, 2009

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What drives tank storage demand? Price Volatility!

Gepubliceerd Jacob on 2 oktober 2017 14:30:46

Volatility is applied to describe fluctuations of oil prices and it relates to the level of uncertainty in the market. Historic volatility is calculated by the standard deviation of an oil price return series, measured during a certain time frame.

Introduction to Price Volatility
Price volatility will stimulate traders to buy low and sell high. In this article you will learn about price-volatility and how it influences demand for tank storage.

There are other ways to calculate volatility i.e. looking at the daily high and low range of oil prices during a trading session or the estimated volatility of an option (implied volatility). Implied volatility offers an outlook on the expected volatility and is the opposite to historic volatility that looks back into recent history. It is important to understand that there are events that can impact the level of price volatility.

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When analyzing the Brent crude price and periods of high volatility (see figure 1, orange circles) there are a number of time frames when crude futures prices dropped while volatility expanded. In this chart we have focused on three periods. Early March, US stock reports showed higher-than-estimated builds in American crude inventories which resulted in a collapse of oil prices. In April and May, US crude production rose to record high and worries grew on OPEC members’ compliance to their output reduction deal. Late May, the market reacted disappointed on OPEC’s decision to extend its output reduction deal. In all cases, oil prices showed a steep drop and price volatility grew. In figure 2, these periods could clearly be identified as a high volatility regime.

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Importance of price volatility to tank storage companies
Important for tank storage companies to understand is that in times of high volatility, such as described in these three cases, trading volumes on the paper market are very high. As traders are able to make bigger profits in a high volatile regime when an old saying become reality: ‘buy low and sell high’. Taking into account that every paper position is squared by a physical position, one can understand that also physical trade will increase. More physical trade will eventually lead to more demand for tank storage capacity.

Is price volatility the only business opportunity indicator for tank storage companies?
There are other indicators that should be taken into account such as market structure, arbitrage and more. These topics and PJK’s market model will be covered in upcoming weeks.

Learn what drives tank storage demand. Join the FREE Webinar: PJK Tank Terminal Commercial Performance Model upcoming October 30th 2017.

Source: Grimes, A.H., Trading Volatility Compression, 2014

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ARA stocks down, led by fuel oil

Gepubliceerd Jacob on 21 september 2017 17:34:18

London, 21 September (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region fell by 3.8pc on the week to 5.38mn t today, reflecting lower fuel oil, gasoil and gasoline inventories, according to consultancy PJK.

Fuel oil stock declined by 13pc on the week owing to a combination of lower imports volumes — particularly from Russia — and substantial outflows. Product came from Germany, Poland, Russia and the UK. No very large crude carriers (VLCC) left the ARA hub this week, but one Suezmax — the Ottoman Nobility chartered by Vitol to load 130,000t from Rotterdam — sailed to Lome, Togo, on 19 September. Two other tankers left terminal in the ARA region over the past seven days to Africa for orders and the Mediterranean, respectively, but details were slow to emerge. This week’s lack of exports to Asia-Pacific is likely to be temporary. Arbitrage economics to Singapore have strengthened recently, triggering the booking of several VLCCs to load from Rotterdam in the first half of October.

Gasoil inventories declined on the week, reflecting tighter diesel supplies in northwest Europe. Diesel exports from the US Gulf coast remain thin and are forcing Latin America buyers to source product from Europe. Meanwhile, the steepening backwardation in Ice gasoil futures is also driving traders to minimise inventory levels. The premium for the front month Ice gasoil contract to the second month contract was trading at $7.25/t today, having settled at $6.25/t on 14 September. Product was imported from Finland, Norway and Russia and was exported to the Mediterranean for orders, the UK and France.

Gasoline stock levels contracted by 2.2pc on the week. Larger outflows to Latin America and west Africa destinations such as Brazil, Mexico, Panama, Guinea, Ghana and Nigeria more than offset a drop in export volumes to the US and Canada. Exports from the Baltic, the Mediterranean and northwest Europe exhibited similar patterns for US-bound cargoes, according to fixture lists compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options halved in the week to 21 September, falling to 585,000t, from 1.1mn t in 8-14 September.

Naphtha inventories rose by 1.9pc on the week. Firming blending demand from regional gasoline producers failed to absorb the considerable volumes delivered from Denmark, Germany, Italy, the UK, Russia and Portugal. No naphtha cargoes were exported from storage facilities surveyed by PJK this week, but some product was loaded on tankers straight from regional refineries. The BW Wren — a Medium Range (MR) tanker chartered by ExxonMobil started to load a 40,000t Singapore-bound cargo at Rotterdam on 19 September. And the High Strength, another MR booked by Petrobras to ship 37,000t from Brazil, arrived at Vlissingen in the Netherlands on 18 September. Barge demand from customers along the Rhine remained lacklustre this week despite favourable loading conditions. Water levels were high enough for barges to sail south of Frankfurt without any loading restrictions throughout most of this week.

Jet fuel stocks rose on the week, despite the steeper backwardation on Ice gasoil futures, as demand in northwest Europe slowed.

Argus reporter: Benoit Petre

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Higher outflows pushed ARA stocks down

Gepubliceerd Jacob on 14 september 2017 16:51:17

London, 14 September (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region region fell by 6.1pc on the week to 5.59mn t today, reflecting large fuel oil, gasoline and diesel stock draws, according to consultancy PJK. Physical outflows of gasoline and diesel to the US and foreign markets traditionally supplied by the US reached new highs as tankers booked in the wake of Hurricane Harvey are now being loaded in Europe.

Gasoil stocks fell from a week earlier, reflecting tightening supplies in the northwest European market. Backwardation on prompt Ice gasoil futures has eliminated the gains from keeping product in storage tanks. Cargoes have been departing from Europe to Latin America to meet demand in the latter region, which would typically be supplied from the US Gulf coast. Product was also exported to the UK. Import volumes were below average as supply from Finland and the US failed to offset the absence of inflows from the Baltic. Barge demand from customers along the Rhine was described as subdued despite favourable loading conditions on the river. Inventory levels were at their lowest since 10 August, when stock levels dipped in the aftermath of the unplanned shutdown at the Shell Pernis refinery.

Gasoline inventories declined in the week owing to a combination of lower inflows and a rise in the numbers of US-bound cargoes. Product came from France, Norway and the UK and was shipped to Canada, Mexico, the US and Latin America. Export volumes to the US from the Baltic, the Mediterranean and northwest Europe experienced strong growth too, according to fixture lists compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options loading 8-14 September rose to 1.1mn t, up from 870,000t the previous week. Meanwhile, outflows to west Africa remained broadly unchanged with 259,000t booked to load in the week from 14 September, up from 238,000t a week earlier.

Fuel oil inventories dropped by 15pc week-on-week on the back of a surge in export volumes. On top of one very large crude carrier (VLCC) and one Suezmax leaving the ARA region to Singapore, another Suezmax sailed to Ghana and a smaller Aframax went to Gibraltar for orders. On the supply side, product came from Poland, Russia and the UK.

Naphtha stocks fell too as strong blending demand from gasoline producers in the ARA region absorbed more than the considerable volumes delivered from Algeria, Denmark, Russia, France, Spain and the UK. Barge demand from the hinterland was described as below-average, reflecting modest demand from crackers along the Rhine.

Jet was the only oil products to experience a stock build in the ARA region this week, after a vessel arrived from South Korea. Regional demand remained weak. The number of provisionally booked vessels to take northwest European jet fuel transatlantic in a rare arbitrage opportunity, which opened ahead of Hurricane Harvey, was overstated said market participants.

Argus reporter: Benoit Petre

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ARA stocks up, led by fuel oil

Gepubliceerd Jacob on 31 augustus 2017 17:20:36

London, 31 August (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region rose by 6.1pc on the week to 5.87mn t today, reflecting a surge in fuel oil inventory, according to consultancy PJK. Any impact from additional transatlantic exports following weather-related supply restrictions in the US will take time to show.

Fuel oil stocks rose by 27.5pc in the week to 31 August, reflecting the combination of above-average import volumes and lower outflows. Product came from Poland, Russia, the UK and the US. No very large crude carriers (VLCCs) left the ARA region this week but one smaller tanker — probably a long-range vessel (LR) — sailed earlier this week to Gibraltar for orders.

Naphtha inventory rose by 17pc on the week, owing to lower demand from the cracking pool and high import volumes from Algeria and France. Intake from the petrochemicals industry was described as weaker this week despite a narrowing naphtha premium over rival propane feedstock. The naphtha-propane spread averaged $8.50/t on 24-30 July, down from $17.30/t a week earlier. Meanwhile, intake from gasoline producers across the ARA region firmed.

Gasoline stocks edged by 2.8pc up on the week as much higher inflows more than offset an upswing in export volumes to the Mideast Gulf and west Africa. Gasoline cargoes came from France, Latvia, Italy, Norway, Spain and the UK. And local supply was said to be on the rise in the wake of the gradual restart of units at Shell’s 420,000 b/d Pernis refinery. Product was shipped east of Suez for the first time since late July, with tankers leaving terminals in the ARA region to Pakistan and the Mideast Gulf for orders this week. Gasoline cargoes were also exported to Canada, Latin America for orders, Ghana, Nigeria, Mexico, Senegal and the US. Volumes loaded on US-bound tankers in the week to 31 August were described as average. Any impact from Hurricane Harvey on transatlantic export volumes will only materialise in the coming weeks, given the inherent lag between booking and loading times.

Jet fuel stocks held independently in the ARA region fell by 15,000t to 572,000t as imports from the Mideast Gulf and Asia arrived into other northwest European ports. At least 210,000t of jet fuel arrived into Thames ports and Fawley in the week to 31 August on three vessels. This helped to ease regional supply tightness seen last week.

Gasoil inventory remained broadly stable on the week as surging import and export volumes balanced each other out. Inflows from the Baltic were described as particularly high with products coming from Finland, Latvia and Russia. Germany also exported gasoil to the ARA region this week. At the same time, outflows picked up with cargoes being shipped to Argentine, France, Germany, Guinea, Mediterranean for orders, Senegal for orders, Sweden and the UK. Barge activity was mixed this week with below-average demand from customers along the Rhine contrasting with brisk barge trading activity in the ARA.

Argus reporter: Benoit Petre

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Lower gasoil inventory offset ARA fuel oil stock build

Gepubliceerd Jacob on 24 augustus 2017 17:13:36

London, 24 August (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region edged 1.3pc up on the week to 5.53mn t today, as a drop in gasoil stock levels failed to fully offset a sharp increase in fuel oil inventory, according to consultancy PJK.

Fuel oil stocks increased by 27pc on the week, owing to a combination of substantial import volumes and limited outflows. Product came from Canada, France, Lithuania, Poland, Russia and the UK this week. Meanwhile, the sole outgoing tanker to load fuel oil in the ARA region this week was an Aframax heading to the Mediterranean for orders.

Gasoil inventory fell on the week as demand for diesel cargoes in northwest Europe remained steady amid a slowdown in arrivals from the US Gulf Coast. Shipments from the US helped lift inventory levels the previous week to almost 2.9mn t as cargoes arrived in northwest Europe, having departed at the start of August following the news of a fire at Shell’s Pernis refinery. But exporting diesel from the US Gulf coast has since become less attractive as freight rates rose. Gasoil was also supplied from Finland, Russia and the UK. Export volumes were steady on the week with cargoes being shipped to France and the Mediterranean. Meanwhile, barge demand from customers along the Rhine bounced back to its long-term average. Lower water levels capped cargo loads for barges sailing around or south of Frankfurt to two-thirds, compared with no loading restrictions the previous week.

Naphtha stock levels rose by 6.5pc on the week as strengthening local demand from the blending and cracking pools failed to fully absorb substantial import volumes. Product came from Algeria, Denmark, France, Portugal, Spain, Russia and the UK. At least one 37,000t naphtha cargo was also shipped to Brazil this week with the Spruce Express — a Medium Range (MR) tanker chartered by shipper Tricon — leaving Antwerp for Itaqui on 20 August.

Gasoline inventory dropped by 2.2pc in the week to 24 August against a backdrop of slowing flows from and to the ARA region. Gasoline cargoes came from Germany, Sweden and the UK and were exported to Brazil, Ecuador, Ghana, Guinea, Gibraltar for orders and the US. No cargoes were shipped to the Mideast Gulf this week, and west Africa- and US-bound volumes loading from terminals across the ARA region fell on the week. Export volumes to the US and west Africa from the Baltic, the Mediterranean and northwest Europe showed similar patterns, according to fixtures lists compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options loading 18-24 August fell to 481,000t, down from 585,000t the previous week. And the tally for Africa-bound tankers fell to 178,000t down from 296,000t booked to load in the previous week.

Jet stocks remained broadly unchanged on the week at 587,000t. No tankers loaded or offloaded jet in the ARA region this week.

Argus reporter: Benoit Petre

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ARA stocks bounced back led by gasoil

Gepubliceerd Jacob on 17 augustus 2017 16:49:28

London, 17 August (Argus) —Oil products stored independently in the Amsterdam-Rotterdam-Antwerp (ARA) region bounced back by 8pc on the week to 5.46mn t today, after falling by 6.6pc in the week to 10 August, according to consultancy PJK.

Gasoil stocks rose by 11pc in the week to 17 August as deliveries from the US and the Baltic bolstered supplies in the ARA region. Arbitrage opportunities to ship diesel to Europe improved in the aftermath of an outage at Shell’s 420,000 b/d Pernis refinery at the end of July. Cargoes loading from the US in early August would likely reach northwest Europe in mid-late August. The rise in stocks also coincides with limited activity in the barge markets, which would curb volumes of gasoil exports out of the ARA region.

Fuel oil inventories increased by 6pc on the week. No very large crude carrier (VLCC) has left the ARA region this week but one Suezmax with Togo discharge options sailed earlier the week. Meanwhile, below-average inflows came from Poland, Russia and the UK. The relatively low numbers of ships loading or unloading fuel oil this week contrasted with much brisker activity on the barge side.

Naphtha stocks surged by 17.3pc on the back of higher import volumes, from Algeria, France, Spain, the UK and Russia. A modest drop in naphtha demand from petrochemicals customers based in the ARA region and along the Rhine also lent support to the stock build. This came despite the naphtha premium to rival propane feedstock falling to $20.10/t on 10-16 August, down from $32.70/t a week earlier. Slowing demand from the hinterland also emerged despite excellent loading conditions on the Rhine river. Water levels at Kaub have topped the threshold for barge loading restrictions this week over the past six days, enabling barges to sail at full capacity to locations near Frankfurt and further south.

Gasoline remained broadly stable on the week. No cargoes were exported to either the US or the Mideast Gulf this week, but west Africa-bound volumes stood above-average with shipments being sent to Ghana, Ivory Coast and Togo. Canada and Mexico were the two other foreign outlets for European gasoline this week. Meanwhile, below-average import volumes came from France and the UK. Export volumes to the US and west Africa from the Baltic, the Mediterranean and northwest Europe experience showed different patterns this week, according to fixtures lists compiled by Argus. Spot tanker bookings of European gasoline with transatlantic discharge options for loading in the week to 17 August rose to 548,000t, up from 474,000t the previous week. But the tally for Africa-bound tankers fell by 23,000t on the week to 185,000t on 11-17 August.

Jet fuel stocks held independently in the ARA region rose as storage declines from tight regional supply and high demand were offset by the arrival of a long-range vessel from east of Suez.

The Star Energy, chartered by Vitol to carry 90,000t of jet fuel from South Korea, has unloaded its cargo after arriving in Rotterdam last week. The tanker’s product had previously been sold to Shell, following the outage at its Pernis refinery. Demand has picked up in the northwest European jet fuel market ahead of scheduled maintenance at BP’s 400,000 b/d Rotterdam refinery. But supply is tight in the region as a result, and because Pernis is still in the process of restarting. There is limited product on offer for the next 20 days. The Navig8 Honour, chartered by Shell to carry 60,000t of jet fuel from Sikka in India, is set to arrive into Rotterdam on 19 August.

Argus reporter: Benoit Petre

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