Demand for heating oil in Germany fell last week as a result of high consumer stocks, contrary to sellers' expectations of continued buying.
Private heating oil tanks were on average 61pc full on 10 October, an increase of almost two percentage points from the same time in 2023 and more than three percentage points from 2022, data from Argus MDX show.
Consumers have in recent weeks been taking advantage of lower distillate prices to stock up on heating oil ahead of winter. Heating oil prices in September reached their lowest since June 2023.
Although there was a sharp rise in prices at the start of October, sellers experienced another surge in demand. This was driven by consumers buying because of escalating tensions in the Middle East and a subsequent jump in Ice gasoil futures.
But demand for heating oil fell significantly in the middle of last week, largely because consumers had stocked up sufficiently and no longer felt the need to buy at a premium. A logistical bottleneck for deliveries further reduced demand.
Demand for imported diesel is also decreasing.
An economic slowdown in Germany continues to suppress diesel demand. This trend could continue until at least the end of the year, federal government data show.
Operators are able to run barges at full capacity. This, coupled with overall low demand, is leading to a fall in freight costs from the Amsterdam-Rotterdam-Antwerp (ARA) hub into Germany.
There is increased domestic supply in western Germany.
A major supplier at Shell's 334,000 b/d Rhineland refinery resumed spot sales of heating oil and diesel last week, having halted them because of an unplanned unit shutdown.
