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Oil barges pile up outside ARA ports as storage fills
[LONDON] Dozens of barges carrying refined oil products are being held outside major northwest European ports as storage tanks are saturated, traders said on Friday.
At least 60 tanker barges were being delayed outside the ports of Amsterdam-Rotterdam-Antwerp, with discharge and loading expected to be delayed by as much as two weeks in some cases, the traders said. "It's logistical issues - full tanks and more imports," one trader said of the barge delays.
This is the latest indication of the increasing logistical pressure on the oil market from the supply glut.
Lower seasonal demand for gasoline from the United States, Asia and West Africa and large imports of diesel have led to a significant oil product stocks build in Europe's Amsterdam-Rotterdam-Antwerp (ARA) in recent months.
Traders have already opted to store diesel and gasoline on tankers off the coasts of Europe as tanks brim. There is now just 10 percent of operational storage capacity left in ARA gasoil tanks, according to industry monitor Genscape, leaving little space for those looking to store it on land.
Around 450,000 tonnes of diesel are stored on water while around 10 tankers totalling some 600,000 tonnes have been booked in recent days to store gasoline, according to traders and shipping data. "Storage is pretty full ... barges need to wait for vessels to come in and make some room," a barge broker said.
Congestion is particularly bad outside the port of Amsterdam, with some reports that the port has barred barges from entry.
The ports of Amsterdam, Rotterdam and Antwerp did not reply to requests for comment.
There were indications that some traders were also using barges as floating storage, albeit for shorter periods of time, according to barge brokers and traders. "If the economics work, traders will float. But if they don't and there is no where to put it - they have no choice,"the trader said.
Weak demand for diesel and heating oil in key inland markets such as Germany, France and Switzerland piled pressure on the barge market and storage facilities.
At the same time, refineries in Europe continue to operate at near maximum level as profit margins are still strong due to low crude oil prices and relatively strong overseas demand for gasoline and naphtha, particularly from Asia and China.