LONDON, Dec 31 (Reuters) – Oil product stocks in Europe reached their highest in more than 3-1/2 years last week, data from Dutch-based PJK International showed on Wednesday, as a price contango in the market makes storage of fuel profitable.
The combined total of gasoline, diesel, gasoil, fuel oil, naphtha and jet fuel reached 5.093 million tonnes for the week, which was the highest since May 2011.
There was a contango in gasoil and gasoline, where prices for prompt delivery are lower than for later purchase, meaning there is a strong incentive to store oil rather than sell it.
“There’s a contango, trade is quiet, and the arbitrage to the United States is not open, and stocks there are also very high, ” Patrick Kulsen said.
Gasoline stocks rose 9.2 percent to a six month high of 894,000 tonnes, while naphtha, gasoil and diesel stocks also rose. Jet fuel posted a small fall on the week.
|Incoming cargoes||Outgoing cargoes|
|GASOLINE||Sweden, UK||Med for orders, WAF|
|GAS OIL||Poland, Russia, Sweden, Spain, US, UK||UK|
|FUEL OIL||Poland, Russia, UK||One VLCC destination left for Singapore, one VLCC expected to arrive later in week 1|
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