Product demand surges in Germany after prices dip

Market: Oil products
29/07/24

Demand for heating oil and road fuels rose on the week in Germany after falling Ice gasoil futures caused domestic distillate prices to dip.

The increase in demand, particularly on 22 July, was partly caused by the global IT problems on 19 July after a faulty update by cybersecurity company Crowdstrike.

Loadings at Shell's 334,000 b/d Rhineland refinery and the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery were interrupted by the IT problem and some traders had to postpone trades until 22 July.

Overall demand remains short of traders' expectations, however, which is reflected in the comparatively low storage levels in private heating oil tanks and industrial diesel tanks. Both are more than one percentage point below levels at this time last year, according to data from Argus MDX.

The lower storage levels despite retreating prices have been partly attributed to the current holiday season, traders said.

Domestic refining output continues to cover buying interest sufficiently, so Germany's diesel imports also remain low. Rising import margins and receding oversupply could make imports more profitable soon.

Prices in western and southern Germany remain higher. Technical problems at the Rhineland and the Vohburg-Neustadt refineries had caused prices to surge earlier in July. The refineries' operators have since been able to fix the technical problems, which could soon lead to prices falling again. Gasoline is already being traded below the national average again in the south.

By Natalie Mueller

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