Maintenance tightens distillate supply in west Germany
Regional middle distillate prices in Germany diverged last week, with values in the west boosted by refinery maintenance and oversupply weighing on prices in the south.
Heating oil and road fuel supply in Cologne, western Germany has fallen sharply since the beginning of last week after maintenance work started at the 187,000 b/d Godorf refinery at Shell's Rhineland complex.
There was also reduced availability at the nearby 147,000 b/d Wesseling refinery, part of the same Rhineland complex, and a tank farm in Flörsheim that is connected to the complex via pipeline. One supplier halted spot sales of middle distillates and gasoline until at least the beginning of September, traders said.
Traders that typically buy product in Cologne or Flörsheim had to take longer journeys to other tank farms or go south to the Miro consortium's 315,000 b/d Karlsruhe refinery.
Product in Karlsruhe is currently trading at a steep discount to Cologne. Oversupply has put pressure on prices in Karlsruhe for the past few weeks after weak demand and irregular train departures because of a staff shortage left suppliers with more product than they anticipated towards the end of August.
Freight rates for barges that need to pass the Rhine bottleneck in Kaub went up significantly last week after water levels dropped to their lowest point in around 10 months on 30 August.
Water levels are expected to fall below 1m this week. Barges to destinations along the Upper Rhine would then only be able to load up to 40pc of their maximum capacity, making it likely that freight rates will rise further.
Related news posts
Nigeria admits gasoline subsidy troubles: Update
Nigeria admits gasoline subsidy troubles: Update
Adds details on Nigerian gasoline imports Lagos, 2 September (Argus) — Nigeria's state-owned oil firm NNPC has admitted that it owes "significant debt" to gasoline suppliers and that the "financial strain has placed considerable pressure on the company and poses a threat to the sustainability of fuel supply". The short statement, issued on 1 September, comes as long queues at service stations in Nigerian cities enter a fourth week. NNPC's chief financial officer Umar Ajiya revealed on 20 August that the company required reimbursements from the government to cover the difference between gasoline import costs and discounted domestic sales because it has been importing "at a cost price and government is telling us to sell it at half price". Nigeria's "implicit subsidy costs [of gasoline]" could "increase to 3pc of GDP in 2024, from 1pc of GDP in 2023", the IMF said in May. The financial constraints on NNPC, Nigeria's primary gasoline importer, may have already tempered gasoline deliveries at the country's ports. Finished gasoline imports averaged 22,000 t/d in August, according to Vortexa data, down from 26,000 t/d in the previous seven months. Nigeria typically tenders for around 1mn t/month of gasoline imports, a market source told Argus , although this has fallen to around 800,000 t/month of late due to lower cash and finance available to the NNPC. Some vessels carrying gasoline are anchored offshore Nigeria and unable to discharge because of the company's financial situation, the source said. NNPC and other marketers in Nigeria are currently holding low gasoline stocks, according to another source. President Bola Tinubu announced in his inaugural speech in May last year that his administration was ending the country's longstanding gasoline subsidy. This led to NNPC hiking the price of gasoline by 165pc at its retail stations in Lagos two days later. The company's stations in other parts of the country implemented larger hikes depending on their distance from Lagos, the country's main entry port for imported gasoline. NNPC raised the gasoline price by a further 14pc in Lagos on 18 July last year, saying the hike was necessary because of international gasoline price movements and the prevailing dollar exchange rate. But after the onset of a cost of living crisis and nationwide social unrest in the wake of the two previous gasoline price hikes, the presidency and NNPC issued separate statements on 15 August 2023 saying gasoline prices would not be raised any further. NNPC would subsequently lean on its role as the country's sole importer of gasoline, a position it has filled almost without a break since 2017, to set gasoline ex-depot prices for the country's product marketers below its import costs while also using the country's largest chain of forecourts to set gasoline prices at the pump lower than all other last-mile distributors. NNPC said in its 1 September statement that it "remains dedicated to its role as the supplier of last resort, ensuring national energy security" as provided for in Nigeria's petroleum industry law and that it is "actively collaborating with relevant government agencies and other stakeholders" to clear its backlog of debt to gasoline suppliers. "This development.. really highlights the urgency of the Dangote supply, and the need for that gasoline to come to market as soon as possible. All eyes are on the slated start up this month," said Clementine Wallop, director for sub-Saharan Africa at political risk consultancy Horizon Engage. The government said last month that "significant production increases" of gasoline from the 650,000 b/d Dangote refinery and the Port Harcourt refinery are "expected from November". The government indicated that the restart of Port Harcourt is imminent while gasoline production by Dangote will start this month, tied to a programme that will see the refinery supplied with crude by NNPC in transactions settled in the local currency. By Adebiyi Olusolape and George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Limited funding curb Australia's 1H bitumen imports
Limited funding curb Australia's 1H bitumen imports
Singapore, 2 September (Argus) — Australia's bitumen imports in this year's first half fell by 20pc against a year earlier, as state councils cut road construction budgets in the 2023-24 fiscal year ending 30 June. The country imported 385,207t of bitumen during January-June, down from 481,841t a year earlier, according to data from Australia Petroleum Statistics. Most states were still feeling the economic impact of the Covid-19 pandemic, with funds reallocated to healthcare and supporting businesses instead of road construction and maintenance, bitumen market participants said. They are expecting a 25pc fall in revenues compared with before the pandemic. The Australian government is still paying off debt from the pandemic, while having to also set aside funding for projects such as a large-scale rail venture. The project, which aims to make Australian cities more interconnected, will cost at least $125bn, some bitumen importers told Argus. Further weighing on Australian consumption was a harsher than usual winter that hampered any road construction activity. Meteorological data show more cold snaps across southeast Australia and extreme weather events like heavy snow and hailstorms close to main cities. This brought snow as far north as the New South Wales and Queensland border during winter. Parts of Victoria and Tasmania also experienced floods. But market participants are cautiously optimistic about post-winter consumption, as damage to roads is likely to be more severe than usual because of the harsh winter conditions. This should support post-winter demand, although limited budget and major renovation work at Geelong Port in Victoria may hinder imports, market participants noted. They forecast bitumen imports in this year's second half to be similar to the same period in 2023 at about 450,445t, or at most down by 5pc from a year earlier. By Chloe Choo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Order ending Canadian rail work stoppage appealed
Order ending Canadian rail work stoppage appealed
Washington, 30 August (Argus) — A Canadian rail employees union is appealing federal government orders that last week forced the resumption of rail service and sent the union and two railroads to binding arbitration. The Teamsters Canada Rail Conference (TCRC) filed an appeal with the Federal Court of Appeal on Thursday, challenging labour minister Steven MacKinnon's order ending the work stoppage and sending the parties to binding arbitration under the Canada Industrial Relations Board (CIRB). The union also appealed CIRB's 24 August decision upholding that order . "These decisions, if left unchallenged, set a dangerous precedent where a single politician can bust a union at will," union president Paul Boucher said. Canadian Pacific Kansas City (CPKC) declined to comment on the appeal, saying only that "operations continue and recovery is progressing well." Canadian National (CN) did not address the appeal directly but said it is prepared to participate in binding arbitration. "While that process is ongoing, we are focusing on our recovery plan and powering the economy," CN said. MacKinnon's 22 August order ended the work stoppage less than 18 hours after the union launched a strike at CPKC, while CPKC and CN locked out union members . The work stoppage froze ongoing rail operations, even though shipments of hazardous materials and other products had already ceased. The union subsequently notified CN that members would go on strike on 26 August. That strike was averted by the CIRB ruling on MacKinnon's order. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
South Korea to require use of SAF for flights from 2027
South Korea to require use of SAF for flights from 2027
Singapore, 30 August (Argus) — South Korea said it plans to require all international flights departing from its airports to use a mix of 1pc sustainable aviation fuel (SAF) from 2027. This comes as more countries are adopting SAF mandates in accordance with the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). Singapore earlier this year announced a 1pc SAF blending mandate from 2026 , with plans to increase to 3-5pc by 2030, subject to global developments and wider SAF availability and adoption. The Ministry of Trade, Industry and Energy and the Ministry of Land, Infrastructure and Transport announced the 'SAF Expansion Strategy' on 30 August, which includes a target for South Korea to capture 30pc of the global blended SAF export market. While not explicitly stated in the statement, some South Korean refineries expect co-processed SAF to be allowed to meet the country's mandate, sources said. This is important as the country already produces small quantities of SAF via co-processing at existing refining facilities, with three of South Korea's four domestic refineries planning to produce SAF through co-processing by the end of this year . Key strategies The ministries outlined three key strategies to achieve the SAF consumption target — gradual expansion of domestic SAF demand, ensuring a stable domestic supply capacity, and establishing a SAF-friendly legal and institutional environment. Airlines can already refuel with SAF at Korean airports, making South Korea the 20th country to do so as part of their plan to increase domestic SAF demand. The country had tested six flights using 2-4pc imported blended SAF between South Korea and Los Angeles since August 2023. An incentive system is being developed to encourage public and private adoption of SAF, with benefits such as preferential allocation of transport rights, reduced airport facility usage fees and the introduction of airline carbon mileage system for passengers and other benefits. A mid- to long-term roadmap for the gradual expansion of domestic SAF demand will be prepared in early 2025, the ministries said. The country's strategy to secure stable domestic supply capabilities includes considering investment support for domestic SAF production such as tax credits. South Korea's four domestic refineries already plan to invest 4 trillion won ($3bn) in renewable fuels, including SAF by 2030, the ministries said. The government estimates a Hydrotreated Esters and Fatty Acids (HEFA) SAF plant with a production capacity of up to 250,000 t/yr will require an investment of approximately W1 trillion. The supply-side strategy also aims to ease regulations on waste recycling to increase the availability of domestic feedstocks for SAF production. Another strategy is to diversify feedstock and SAF production technology options, with pre-testing expected later this year. The government plans to explore alternative feedstock like microalgae and production pathways such as e-SAF, with a view to developing supply chains. South Korea plans to establish a national standard, certification and testing method for SAF with preparation planned for December 2024. By Deborah Sun Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
![](/_next/image?url=%2F-%2Fmedia%2Fproject%2Fargusmedia%2Fmainsite%2Fimages%2F14-generic-hero-banners%2Fherobanner_1600x530_generic-c.jpg%3Fh%3D530%26iar%3D0%26w%3D1600%26rev%3D-1%26hash%3DFC2BEDE406483FEF5FDB9549159BAC11&w=3840&q=75)
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more