March 30, 2016 [OPIS] - Oil trader Vitol is again seen loading large tankers with gasoil from its oil storage terminal at Ventspils for discharge in either the Amsterdam-Antwerp-Rotterdam (ARA) region or for floating storage off the U.K., in moves that likely reflect new trading positions and will influence distillate prices in northwest Europe.
The Vitol-controlled ore-bulk-oil carrier SKS Tyne was loaded with nearly 94,000 metric tons of gasoil of an unspecified grade from Ventspils around March 25, and is now offshore at Southwold, U.K., a known floating storage region for northwest Europe product cargoes.
The SKS Tagus is said to be next calling at the Latvian port to load 86,000 tons of gasoil for Vitol, according to information compiled from port agents. The vessel is now at Rotterdam after discharging its previous gasoil cargo loaded from the same port around March 10, according to vessel tracking data.
About 1 million tons of diesel was tracked on tankers at the height of floating storage in early February, as much as half of it on vessels controlled by Vitol, according to data compiled by the OPIS Tanker Tracker. The market contango, when the future price was higher than the spot price, made it profitable to take trading positions that saw distillate stored on vessels, or at terminals, for sale at a later date. Onshore storage also reached records in late-December, continuing at high levels through to mid-February.
Storage positions were unwound, traders told OPIS, but the new vessels being loaded for the ARA and Southwold areas suggest that storage is again featuring in Vitol’s trading positions for northwest Europe.
There have been eight tankers seen loading a total of 671,000 tons of an unspecified grade of gasoil from Ventspils since Jan. 22, according to OPIS calculations, based on monitoring of the port. All have been Long Range 2 product tankers, the largest available, normally used for transporting refined products over longer voyages, not short-haul sailings of three days’ duration.
A further three product tankers with 269,000 tons of ultra-low-sulfur diesel or gasoil have also been tracked loading from Ventspils over the same period.
Vitol also used the tanker STI Park to store 90,000 tons of diesel just outside the port of Ventspils for most of January, and had 90,000 tons each on the ore-bulk-oil carriers SKS Tyne and Tana for around two months earlier this year.
The oil trader has a 51% share in Ventspils Nafta, which owns storage and pipelines at the Baltic port, and is the region’s largest onshore terminal storage region. Vitol has also been tracked sending a handful of gasoil or heating oil cargoes to north America from Ventspils so far this year, reflecting a rare, reverse arbitrage opportunity.
