July 18, 2016 [OPIS] - A vessel has been fixed to transport diesel from the Netherlands to Sweden, marking an unusual break with the normal direction of travel for the product between the two countries.
The Ridgebury John B has been heard chartered by Shell to load 44,000 tons of diesel at Rotterdam this weekend before discharging the cargo at the Swedish port of Gavle, north of Stockholm.
Diesel is normally imported into Gavle from ports in the nearby eastern Baltic such as Primorsk, Ust Luga and Riga. When diesel has been exported from the Swedish port, it has tended to head to Europe’s main inventory hub in the Amsterdam-Rotterdam-Antwerp (ARA) area as well as U.K. ports, according to sources and the OPIS Tanker Tracker.
Market participants suggested that the unusual movement could be the result of a buyer’s specification requirement or Shell filling up storage tanks near the port.
“It’s quite unusual, it’s tough to explain,” said one broker.
“It could be some tanks in Scandinavia are needing some very good cold properties, and I’ve seen them bringing in dual purpose kerosene from the East,” he said. “So maybe they are blending something in the ARA to make very good cold property material to then store it in Scandinavia. … Maybe they need some specific grade that they can only get in the ARA.”
Another broker said that the current diesel market contango could mean that Shell is putting diesel into storage in tanks in Scandinavia as well as in the ARA, where diesel and gasoil storage rose sharply in the week to July 14.
Data from local oil consultancy PJK suggested that combined stocks for the two products rose by 250,000 tons to 3.5 million tons over the week.
The current diesel contango in northwest Europe has widened as a result of weak prompt prices and high stock levels.
