Conditions for transporting oil products in Germany are improving, as rising Rhine water levels ease barge restrictions and rail disruptions subside.
Water levels on the Rhine continued to rise over the past week, reaching just below 1.80m at the key bottleneck near Kaub on 2 June. The federal waterways and shipping administration expects levels to exceed 2m on 5 June for the first time since early March.
Once that threshold is crossed, barges travelling from the Amsterdam-Rotterdam-Antwerp (ARA) hub to destinations along the Main and Upper Rhine will be able to load up to 96pc of capacity.
Rising water levels have allowed barge operators to continue lowering freight rates along these routes. Rates for shipments from ARA to Frankfurt have nearly halved since peaking in mid-April at €60/t for diesel and €61/t for gasoline.
Increased supply and cheaper transport have led to lower product prices at tank farms along the Rhine. The price gap between Germany's most and least expensive regions for heating oil and road fuels is narrowing.
Meanwhile, train operator Deutsche Bahn has completed scheduled construction work on the rail line between Schwedt and Berlin, traders said. Since 11 April, trains from the 230,000 b/d Schwedt refinery had been rerouted via Rostock — a 400km detour — causing delays and temporary supply tightness in Berlin and southeastern Germany, while oversupply built up at the refinery.
Output at the Bayernoil joint venture's 215,000 b/d Vohburg-Neustadt refinery remains restricted into June. Several stakeholders plan to reduce or halt heating oil production this month in favour of increasing diesel output, traders said.
