German end users bought significantly more heating oil last week than in previous months, traders said, as low fill levels in private heating oil tanks ahead of autumn prompted restocking despite elevated nationwide prices.
Heating oil sales for truck loading reported to Argus for the week ending 28 August rose by more than 50pc from the previous week.
Since early March, consumers had shown considerable restraint in purchasing heating oil. Higher German prices after the outbreak of the US-Iran war led buyers to delay rebuilding inventories, unlike in previous years when stock replenishment typically began in spring.
As a result, private heating oil tank fill levels fell to their lowest since at least 1 January 2020 on 18 May, according to Argus MDX data. Although inventories have inched up since then, they remain at around 47.5pc, still well below levels seen in previous years.
The approach of autumn and the start of the heating season have now spurred demand. Temperatures across Germany fell noticeably last week, prompting consumers to begin rebuilding stocks despite persistently high prices, traders said.
Adding to this is the uncertainty over an end to the Middle East conflict. If the fighting continues, a significant fall in Ice Brent and Ice Gasoil futures — and thus in domestic heating oil prices — appears unlikely. By contrast, higher heating oil demand could strain German supply during autumn and push prices higher. Some consumers are already buying heating oil at the end of August to hedge against this risk.
The end of the summer holiday period is another factor supporting demand, traders said, as customers typically make fewer heating oil enquiries during holiday periods.
Heating oil for September delivery is trading at a premium to August-delivery material, as some suppliers already expect tighter availability in September.
