German refined product demand boosted by falling prices

: Oil products
23/11/13

German traders and consumers increased their purchases of heating oil and diesel in the past week as Ice gasoil futures prices lost ground, and limited domestic availability lifted local price premiums to those in the Amsterdam-Rotterdam-Antwerp (ARA) hub.

The amount of heating oil and diesel traded nationwide, as reported to Argus, rose for the first week since the beginning of October. Demand for heating oil from consumers in particular has been strengthened by a sharp decrease in prices, according to traders, while diesel sales have been boosted by an impending switch to winter specification product.

But average daily spot sales of middle distillates are still trending lower year on year.

Growing global demand concerns have put pressure on Ice gasoil futures this month, in particular after China last week once again reported disappointing export data. In Europe as a whole, meanwhile, demand for diesel is low. Air passenger numbers in the US fell to their lowest in two months. At the same time, concerns are receding about a potential supply shortage as a result of the Israel-Hamas conflict.

Middle distillate prices in Germany followed futures down, even though spot supply of diesel in particular remains limited in large parts of the country. At the Miro consortium's 299,000 b/d Karlsruhe refinery, various suppliers are limiting their diesel availability; at Shell's 334,000 b/d Rhineland refinery and at several tank farms along the Rhine river there are similar restrictions; Bayernoil's 207,000 b/d Neustadt-Vohburg refinery is still producing at minimum capacity after recurring production issues. Towards the end of last week BP limited spot availability at its 257,000 b/d Gelsenkirchen refinery for an unknown reason.

This reduced domestic supply is lifting the premium for diesel in Germany, and especially in Karlsruhe, relative to ARA, making imports along the Rhine an attractive proposition for traders. Calculated import margins from ARA to Karlsruhe have recently closed the gap to margins for locations further down the river. After a recent sharp increase in Rhine water levels, freight rates for transports from ARA to locations on the Rhine have stabilised in the past week. Delayed loadings and arrivals, along with the increased import demand, mean some barge fleets are fully booked until the end of this week, according to shipping operators.

By Johannes Guhlke

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25/12/23

Mexico's trade surplus widens in Nov

Mexico City, 23 December (Argus) — Mexico's trade surplus widened slightly in November from the previous month, despite sharp declines in both exports and imports in the non-oil category. Mexico posted a $663mn trade surplus in November, statistics agency Inegi said, up from a $606mn surplus in October, though on lower overall trade volumes. Total exports reached $56.4bn, while imports stood at $55.7bn, compared with $66.1bn and $65.5bn, respectively, in October. The result contrasted with the $391mn deficit forecast by Mexican bank Banorte. Inegi attributed the wider surplus to an increase in the non-oil trade surplus to $2.84bn in November from $2.74bn in October, alongside a widening of the oil trade deficit to $2.18bn from $2.13bn. Within non-oil trade, manufacturing exports fell by 16pc to $52.1bn in November from the prior month, while automotive exports declined by 2.2pc to $15.8bn, following a 4.8pc increase in October. The US absorbed 79pc of Mexico's light vehicle exports from January-November, with Mexico supplying 17pc of total US auto imports over the 11-month period, according to Mexican auto industry association AMDA. The "others" component of non-oil manufacturing exports dropped by 20pc to $36.3bn in November, nearly erasing October's 23pc gain to $45.5bn. The cumulative impact of US tariffs on Mexican goods is becoming clearer. Mexican bank Banco Base estimates the US levied an effective 4.69pc tariff on Mexican goods through September — below the 25pc blanket rate due to exemptions for goods complying with the USMCA free trade agreement. "The low tariffs have allowed Mexican exports to continue growing, particularly computer equipment, which rose by 83.39pc year to date through September compared with the same period in 2024, with a tariff of just 0.17pc," the bank said. Those "contrast sharply with passenger cars, which face a 15.29pc tariff," which maintain expectations of 7pc annual export growth in 2025, according to the bank. Agricultural exports rose by 3.8pc to $1.4bn in November after increases of 7.2pc in October and 4.1pc in September. Oil-related exports totaled $1.55bn in November, down from $1.82bn in October, including $1.03bn in crude and $514mn in refined products on lower prices and volumes. Mexico's crude export basket averaged $57.66/bl, down by $0.84/bl from October and $8.09/bl lower compared with a year earlier. Crude export volumes fell to 597,000 b/d in November from 717,000 b/d in October, remaining well below the 1.088mn b/d exported in November 2024. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

UK refiners seek unused CO2 allowances after closures

25/12/23

UK refiners seek unused CO2 allowances after closures

London, 23 December (Argus) — UK downstream association Fuels Industry UK has urged the government to reallocate unused free CO2 allowances from two recently closed refineries to help remaining plants cope with rising emissions compliance costs. The group wants allowances granted under the UK Emissions Trading Scheme (ETS) for the 150,000 b/d Grangemouth and 105,700 b/d Lindsey refineries to be redistributed. Each allowance permits the holder to emit one tonne of CO2 equivalent. Grangemouth and Lindsey were allocated 441,925 and 541,475 allowances for 2025, respectively. It is unclear how many remain after their closures in April and August. The association warned the sector "may not survive that long" without temporary support, citing carbon costs that exceed those faced by overseas competitors until the UK's carbon border adjustment mechanism (CBAM) takes effect. ExxonMobil's 270,000 b/d Fawley refinery — the UK's largest — will spend $70mn-80mn on carbon costs this year, rising to $150mn within five years, the company's UK chair Paul Greenwood told MPs during an Energy Security and Net Zero Committee hearing in October. Fuels Industry UK chief executive Elizabeth de Jong also addressed the committee, highlighting broader cost pressures. It remains unclear whether refined fuels will be covered by the UK CBAM, which starts in January 2027. Fuels Industry UK is seeking confirmation that they be included from January 2028, and it wants additional free UK ETS allowances distributed to sectors not covered by CBAM during a "volatile" period linked to expected UK-EU carbon market linkage. Such linkage would exempt UK and EU from each other's CBAMs, but talks have yet to start. UK refiners have also missed out on government energy price support schemes during the gas price surge triggered by Russia's invasion of Ukraine, de Jong told MPs. Refiners paid market rates to power operations at their UK sites, missing out on discounts afforded to UK companies under the Energy Bill Relief Scheme, which ran between October 2022-March 2023, and then under the Energy Bills Discount Scheme between April 2023-March 2024. By contrast, US refiners access natural gas at roughly one-third of UK prices, Greenwood said. By George Maher-Bonnett Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

TKW-Frachtkosten steigen 2026

25/12/23

TKW-Frachtkosten steigen 2026

Hamburg, 23 December (Argus) — Die Kosten für den Transport von Heizöl, Diesel und Benzin per Tankkraftwagen steigen im kommenden Jahr vielerorts an. Dies ist primär auf höhere Dieselkosten infolge der steigenden CO2-Bepreisung und THG-Erfüllungskosten zurückzuführen. Auch ein stetiger Anstieg der Lohnkosten sowie Investitionen in die Flottendekarbonisierung treiben die Kosten weiter. Anbieter handeln Diesel für Januar bundesweit derzeit mit einem Aufschlag in Höhe von etwa 10 €/100l bis 13 €/100l gegenüber Dezemberware. Der Grund hierfür ist der Anstieg der CO2- und THG-Kosten im neuen Jahr. Viele Transportverträge enthalten sogenannte Floater-Klauseln, die Preisänderungen beim Kraftstoff automatisch auf die vereinbarten Frachtkosten übertragen. Somit geben Spediteure Mehrkosten durch steigende Kraftstoffpreise in der Regel an ihre Kunden weiter. Um welchen Betrag die Frachtkosten tatsächlich ansteigen werden ist aber noch unklar, denn neben dem höheren Dieselpreis belasten unter anderem auch steigende Personalkosten die Branche. Der Fahrermangel setzt sich fort und wird aktuell durch Krankheitsausfälle sowie die laufende Urlaubszeit zusätzlich verstärkt. Spediteure berichten zudem, dass die Nachwuchssuche zunehmend schwierig wird. Viele Beschäftigte werden in den kommenden Jahren in den Ruhestand gehen. Um dem entgegenzuwirken, erhöhen Speditionsunternehmen Löhne oder werben verstärkt Personal im Ausland an — Maßnahmen, die ebenfalls kostentreibend wirken. Auch Investitionen in die Dekarbonisierung der Flotten wirken sich auf die Kostenstrukturen aus. Die Anschaffung emissionsärmerer Fahrzeuge sowie zusätzliche technische Anforderungen und Dokumentationspflichten führen zu höheren Grundkosten, die in den Frachtraten berücksichtigt werden müssen. Einige Händler berichten jedoch, dass ein Anstieg ihrer Frachtkosten im kommenden Jahr bislang noch ausbleibt. Dies führen sie auf bestehende Vertragsstrukturen zurück. So verfügen manche Spediteure über längerfristige Vereinbarungen, teilweise mit Laufzeiten von mehreren Jahren, wodurch kurzfristige Kostensteigerungen zunächst abgefedert werden. Von Marcel Pott Senden Sie Kommentare und fordern Sie weitere Informationen an feedback@argusmedia.com Copyright © 2025. Argus Media group . Alle Rechte vorbehalten.

Viewpoint: Rising premium base oil supply to target EU

25/12/23

Viewpoint: Rising premium base oil supply to target EU

London, 23 December (Argus) — European premium base oil spot prices could face downwards pressure in 2026 from increased competition as global supply rises and import duties are removed. Average Group II European spot prices have fallen steadily since the end of April, by 14pc to €932.50/t assessed on 12 December. This is mostly owing to muted demand but exacerbated by a weakening US dollar against the euro as volumes are bought on a dollar basis and sold in euros in Europe. A persistent supply overhang from the US saw exporters increasingly target European buyers. This trend looks to continue into 2026 as the EU looks to remove a 3.7pc import duty on US Group II shipments. This is part of EU-US tariff negotiations, with EU states showing broad support for the duty removal of a large package of US goods, including base oils. A European parliament vote on this is slated to take place, probably in late January. Europe is a net importer of Group II base oils, with ExxonMobil's 1mn t/yr refinery in Rotterdam the only northwest European production site. Base oil and finished lubricants exports to the EU and UK made up on average 14pc of US total exports since 2020, EIA data show. Freight rates will again play a part in deciding how much product arrives in Europe in 2026. Rates from the US to Europe have been falling since the summer. Argus assessed 40,000t specialised chemical tankers on the route at an average $38.08/t in October, down by 15pc from August, and 5,000t part-cargo assessed rates fell by 10pc in the same time to average $69.50/t. Should rates continue to fall and the EU remove duties, US shipments to Europe are likely to increase. European prices are the highest globally. Supplies of N600 are at a $463.50/t premium to US equivalents and at a $404.50/t premium to Asia bulk, as assessed on 12 December. Global Group II production is likely to rise in 2026. Polish refiner Orlen will expand its Gdansk facility with an additional 450,000 t/yr, Saudi Arabia's Luberef will expand its Yanbu refinery by 100,000 t/yr, and ExxonMobil's Jurong, Singapore, plant expansion is slated to come online fully by year-end 2025. All these will probably target the highest price region, Europe, for their additional capacity. Spot prices for Group I are also ending 2025 on a downwards trend, as weak demand offsets structurally tighter supply. But this could reverse in early 2026. Orlen will undergo a refinery-wide maintenance for 60 days in the first quarter, affecting output at its 250,000 t/yr Group I unit at Gdansk. EU sanctions on refined products using Russian crude has seen diesel prices rise. The price spread of the premiums Group I SN 150 and diesel carry over the feedstock vacuum gasoil (VGO) narrowed to average $95/t in November, from $233/t in August. Should this continue refiners are likely to prioritise diesel output over base oils. Several European refiners are already pivoting away from base oil production, curbing supply availability and adding upward price pressure. But minimal scheduled maintenances in 2026 is likely to enable supply to recover, and a weak economic outlook should see demand remaining steady. By Gabriella Twining Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

P66, Kinder expand proposed western US fuel pipeline

25/12/22

P66, Kinder expand proposed western US fuel pipeline

Houston, 22 December (Argus) — Independent refiner Phillips 66 and midstream giant Kinder Morgan are expanding a plan for a proposed refined products pipeline system from the midcontinent to western US markets. An initial open season for the project, which closed on 19 December, resulted in significant interest, including shipper commitments for the proposed Western Gateway pipeline, the companies said Monday. As a result, a second open season will launch in January for remaining capacity and will include new destinations west of Colton, California, through a joint tariff with Kinder Morgan's existing SFPP pipeline that will be reversed between Watson, California, and Colton, allowing access to Los Angeles markets. The companies did not disclose the length of the second open season. The Western Gateway project, announced in October, includes a new 200,000 b/d pipeline from Borger, Texas, to Phoenix, Arizona, combined with the reversal of SFPP from Colton, California, to Phoenix, Arizona. Philips 66 owns and operates a 149,000 b/d refinery in Borger. In addition, the Phillips 66-operated Gold pipeline, which currently flows from Borger to St Louis, Missouri, would be reversed to allow refined products from midcontinent refineries to flow south to Borger and supply the Western Gateway system. The companies expect the Western Gateway project to be completed in 2029. The proposed pipeline system comes as two large California refineries are planning to close, including Phillips 66's 139,000 b/d Los Angeles refining complex. Phillips 66 stopped processing crude at the Los Angeles facility in mid-October as part of a planned shutdown announced about a year earlier. It expects to idle remaining units by the end of this month. In addition, Valero is planning to shut down or repurpose its 145,000 b/d refinery in Benicia, California, by April 2026. The planned closures have triggered major concerns about California's tight and often volatile oil products market and the impact on neighboring states . Another large US midstream company, Oneok, is considering building a 200,000 b/d pipeline — the Sun Belt Connector — to carry gasoline, diesel and jet fuel from El Paso, Texas, to Phoenix, Arizona. In addition, US independent refiner HF Sinclair is considering several pipeline expansions that would move more refined products from the Rocky Mountains region to markets further west. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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