German distillate demand rises as prices drop

Market: Oil products
26/08/24

Demand for distillates in Germany rose last week after domestic heating oil and diesel prices dipped to their lowest level in at least a year.

Traded heating volumes as reported to Argus rose by almost 46pc week-on-week. Diesel volumes increased as well, although less significantly.

A drop in domestic distillate prices encouraged consumers to stock up on product. Heating oil traded around €2.60 cheaper in the national average last week compared to the week before. Diesel traded €3 lower on average.

The price decrease came after Ice gasoil futures fell to their lowest level in about 13 months.

Regional oversupply is putting additional pressure on distillate prices.

The Miro group's 310,000 b/d Karlsruhe refinery in southwestern Germany is producing at a high level. Supply in the region exceeds demand, traders say, especially for diesel.

Maintenance at the 187,000 b/d Godorf plant of Shell's Rhineland refinery began on 26 August. The plant was taken offline for the duration of the works. Operator Shell expects the turnaround to last until mid-October.

Supply in Germany's west could be reduced until the plant is operational again. However, traders can still load product at the refinery's 147,000 b/d Wesseling plant, which is unaffected by the work.

By Natalie Mueller

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