Vitol Anchors Tankers as Jet Surplus Fills Storage
Oil trader Vitol, one of the two biggest players in Europe's jet market, had three tankers laden with 220,000 metric tons of the aviation fuel at anchor outside ports in the U.K. or Rotterdam this week, fueling speculation that a surplus of imports is filling up available storage.
Jet and kerosene inventories in the Amsterdam-Rotterdam-Antwerp trading hub are said to be 86% higher than a year ago, as spot prices remain lower than future prices, and low Rhine river water levels curb distillate volumes shipped upstream.
Vitol has 40,000 tons on the High Enterprise at anchor near Lyme Bay, as well as a further 90,000 tons on the Mindoro near Portsmouth, and 90,000 tons on the STI Lombard outside Rotterdam, according to the OPIS Tanker Tracker.
The ships arrived in the region between seven and five days ago, data shows, but have not yet called at ports to discharge cargoes. Imported supplies of jet fuel from outside the 28-member countries are estimated to reach nearly 2 million tons on 32 tankers in September, information compiled from satellite-tracking, traders and ports shows.
That's the second-highest monthly amount seen so far this year, surpassed only by 2.4 million tons seen shipped to the region in August, according to OPIS statistics. Volumes scheduled to arrive in October are already tracked at 1.5 million tons.
Europe has a shortfall of jet fuel, importing nearly 20 million tons in 2014. But new refineries in the Middle East are boosting jet fuel exports to the ARA region and U.K. just as the highest margins since 2008 encourage northwest Europe refineries to increase their own distillate output.
Jet and kerosene inventories in the ARA climbed 21% week on week to 6.4 million barrels for the seven-day period ending Sept. 17, data from BNP Paribas shows.
That's 86% higher than a year ago and 62% above the five-year average the French investment bank said in its weekly inventories report, citing data from PJK International.
Demand for jet fuel in Europe, including Turkey, is seen moderating in the final quarter of 2015, to 1.3 million b/d from 1.5 million b/d in the prior quarter, according to Energy Aspects.
The region's fourth-quarter deficit is seen at 201,000 b/d, more than a third lower than the estimated 335,000-b/d deficit in the July-through-September period, the London-based consultancy said.