Demand for middle distillates in Germany remained subdued in mid-February, while supply was high.
Heating oil demand continued to decline, as many consumers had stocked up in previous weeks. A recent rise in Ice gasoil futures prices pushed up domestic values and further dampened buying interest.
Nationwide, heating oil traded volumes reported to Argus fell by nearly 13pc.
Diesel sales fell by around 12pc nationwide, as construction and agricultural activity was limited by weather conditions. Significant agricultural demand is unlikely before mid-March. Gasoline sales, by contrast, rose slightly, supported by increased travel activity.
Germany's supply continues to outweigh demand even as refineries enter maintenance season, which the Bayernoil consortium kicked off on 14 February with the scheduled shutdown of its 87,000 b/d Neustadt plant.
The situation surrounding Rosneft Deutschland remains a key uncertainty.
On 20 February, the European Commission cleared the German government to take full control of Rosneft Deutschland, but it is unclear if the government will proceed with this step.
Rosneft Deutschland holds significant stakes in the Bayernoil consortium's 214,500 b/d Neustadt-Vohburg, the Miro joint venture's 310,200 b/d Karlsruhe and the PCK consortium's 229,600 Schwedt, accounting for around 14pc of German refining capacity.
The company has been under a federal trusteeship since 2022, which is now linked to US sanctions regulations. Rosneft's German subsidiaries are exempt from US sanctions until the end of April, and Berlin is negotiating an extension.
Diesel imports to northern Germany could increase from the end of February as the switch to transitional diesel takes place. With a higher CFPP limit, intra-European supply to Germany is likely to expand, particularly through additional deliveries from Sweden.
On the Rhine river, shippers have recently lowered freight rates, as high water levels and weak February demand have made sufficient shipping space available.
