Contango Trades Lift Far East Jet Fuel Exports to Europe

Some 2.13 million tons of jet fuel on 36 tankers is tracked arriving in Europe over August as holiday season flying peaks in the region.

Volumes exported from Asia are at 580,000 tons, and comprise around 27% of all imports, according to the OPIS Tanker Tracker, while there are also five Indian cargoes totaling 290,000 tons arriving.

Three of the seven Far East cargoes have yet to be discharged and are at anchor at ports outside northwest Europe and the U.K, amid a continuing market contango, a rise in floating storage and difficulties finding shore-based terminals. Four of these took the slower voyage around the Cape of Good Hope, instead of via the shorter route of the Suez Canal.

Traders report onshore independent terminals in France and Germany are booked through to 2017, and inventories are close to records seen in late 2015 and early 2016 in the Amsterdam-Rotterdam-Antwerp region.

Vitol appears to have been most active in exploiting market conditions in August, with the oil trader reported as the ship charterer or cargo owner of 485,000 tons. Most cargoes came from South Korea or Singapore.

So far in September they're seen with four cargoes, all of which are loading from the Middle East Gulf. Cargoes arriving next month from Ruwais already eclipse volumes in August (340,000 tons versus 345,000 tons) which may reflect the repair and return of the new RFCC at the expanded refinery that has experienced problems.

September volumes are so far counted at 1.6 million tons on 25 tankers, of which three ships are due to load 245,000 tons with options to discharge at other places outside Europe which may reduce the tally.

There's no let up in Indian cargoes, with six tankers scheduled to ship 350,000 tons of jet fuel to Europe for arrival in September, all of which are loading in the last 10 days of August.

Monthly imports averaged 1.8 million tons in 2015, according to Eurostat data.

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