Independently held fuel oil stocks at the Amsterdam-Rotterdam-Antwerp (ARA) hub have averaged 15% higher in August so far compared with July's monthly average, according to Insights Global data. The ARA region is one of Europe's key refining, storage and trading hubs, and its independently held inventories are closely watched as a barometer of regional supply for the marine fuels market.

The month-on-month changes in average ARA inventories from July to August (to date) are as follows:

• Fuel oil stocks up by around 591,000 bbls to 4.62 million bbls
• Gasoil stocks down by around 167,000 bbls to 12.07 million bbls

Fuel oil inventories have climbed by roughly 28% since May, when they fell to their lowest level in more than a decade. Even so, stocks remain 29% below February levels, before the conflict broke out in the Middle East.

Import volumes have driven the build. The ARA hub has imported around 344,000 b/d of fuel oil in August thus far, more than double July's monthly average of approximately 159,000 b/d, according to Vortexa cargo flows data. The largest volumes arrived from Benin (20%), Venezuela (15%) and Mexico (8%). Benin has in recent years served as a West African loading point for barrels from nearby producing countries, while Venezuelan shipments to Europe have resumed under sanctions-related exemptions.

Exports, meanwhile, have moved in the opposite direction. The region has shipped out around 141,000 b/d of fuel oil so far this month, down from roughly 175,000 b/d in July, mainly for unloading in Malaysia (26%), Singapore (25%) and Spain (18%). Asia's main bunkering centres, Singapore and Malaysia, are regular destinations for European fuel oil cargoes.

On the gasoil side, the region's independent inventories — which include diesel and heating oil — have slipped by 1% in August to date compared with July, according to Insights Global. Gasoil stocks have fallen to their lowest level in four years, a level that keeps attention on European diesel supply at a time when refinery maintenance season approaches and the region remains structurally short of middle distillates.

ARA gasoil imports have averaged around 156,000 b/d in August so far, up from approximately 119,000 b/d in July, Vortexa data show. The majority of shipments arrived from the US (36%), Sweden (12%) and the UK (10%).

Despite the fuel oil stockbuild, availability remains tight for prompt deliveries in the ARA bunkering hub, with buyers advised to allow lead times of 5-7 days to secure good coverage from suppliers, a trader told ENGINE. Traders have also reported slow bunker demand in the area. The divergence between rising stocks and tight prompt availability suggests the barrels arriving in the region are not all immediately available for bunker supply, something buyers will be watching as September cargo schedules firm up.

Source: By Nachiket Tekawade, ENGINE,