London, 12 January (Argus) — Independent oil products stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region increased this week despite a big fall in jet fuel inventories to an 18-month low.
Total stocks rose by 1.3pc to 5.507 mn t this week, but low imports pushed jet stocks down by 10.2pc to 582,000t, the lowest since mid-June 2015.
Jet cargoes heading to northwest Europe are taking the longer route around the Cape of Good Hope, rather than through Suez Canal, to take advantage of a contango in the jet structure. Healthy demand in the US and Asia-Pacific this week has drawn product originally destined for northwest Europe.
Independent gasoil stocks in the ARA region rose climbed from a week earlier as low Rhine river water levels restricted the flow of product to inland destinations. This is the third consecutive weekly increase, recovering from 2.542mn t on 22 December. A wider contango on Ice gasoil futures is increasing the incentive for traders to keep product in storage tanks.
Gasoline inventories fell by 1pc this week despite a flurry of outgoing vessels to the Americas and Europe. Arrivals from France, Russia and the UK, and high capacity rate at gasoline blenders across Europe, are the two main likely explanations behind this resilience.
Naphtha stocks dropped by 25.8pc this week. Higher aromatics prices in Europe incentivised steam crackers with feedstock slate flexibility to lean towards naphtha, supporting hinterland demand. High freight rates are still hobbling arbitrage opportunities for naphtha and no cargoes loaded from the ARA region this week.
Fuel oil stocks edged down by 4.5pc this week as a very large crude carrier (VLCC) loading to Singapore left the ARA region on 10 January. With VLCC rates from Rotterdam to Singapore being discussed at $4.25mn, the trade route is generally open.
|Learn more on current and future market dynamics that impact the ARA tank storage sector in our revised ARA TT study.|
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