ARA fuel oil stocks drop 1.2% on week to 1.258 million mt: Insights Global
24th June 2022 14:23 GMT

 

Stocks of fuel oil in the Amsterdam-Rotterdam-Antwerp region, as measured by Insights Global, dropped 1.2% to 1.258 million mt in the week to June 24, after rising 6.1% the previous week.

 

Stocks dropped for the first time in three weeks.

Insights Global does not differentiate per fuel type. Fuel oil stocks in the region represented 24.63% of total refined oil product stocks in the region, which is a significant drop from last week's percentage share of 35%. The four-week rolling average was 1.198 million mt.

Russia has traditionally been the predominant source of HSFO to fill bunker demand in the ARA hub, supplying between 80%-90% of pre-war demand, according to market sources. While the supply composition adjusted slightly immediately after Russia’s invasion of Ukraine in February, flows had now reverted to a pre-war composition, one trader said.

From a European supply perspective, refiners have chosen a sweeter crude diet over recent months to maximize production of secondary products like gasoline. Gasoline cracks were last assessed at $43.48/b June 22, leading refiners to produce those valuable products.

Increased production of gasoline has also exacerbated tightness for VLSFO. Feedstocks like LSSR, commonly use for VLSFO blending, are now going into secondary units like fluid catalytic cracker units to produce the motor fuel. Sweeter crude diets have also left the market short of residual components over recent months.

In downstream bunker markets, demand was mostly quiet. While prices remain high across all grades of bunker fuel in the ARA region, sources reported significant intra-day volatility in the week as the market reacted to instability in upstream crude markets.

Suppliers noted improved availability week on week, with strong availability of all products at ARA ports.

Continued tightened in the European VGO market has again failed to ease this week, with market participants still reluctant to purchase VGO of Russian origin. Alternative sources of VGO from outside of Europe are yet to make their way into the market in any significant volumes. Despite this demand remains high with strong product cracks making refiners to want to buy additional feeds; however a lack of supply has left a hole yet to be filled by an alternative supply of VGO.


Platts ,
24th June 2022 14:23 GMT