Gasoline and gasoline component stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region posted substantial declines the week ending September 15. Gasoline storage levels were down 265,000 MT while gasoline component stocks fell 102,000 MT, resulting in a 367,000-MT total decrease. The gasoline draw was the largest since Genscape began monitoring ARA gasoline products in 2015.
The record-setting declines in the ARA region are likely a result of the recent hurricanes experienced in the U.S. Gulf Coast and Florida, which spurred additional European supply movements to fill U.S. demand.
The first, Hurricane Harvey, made landfall in Texas on August 25 and soon caused excessive flooding throughout the Gulf Coast region.
Following Hurricane Harvey, numerous refineries in the Texas Gulf Coast region shut, causing gasoline production to decrease and prices to increase.
Shortly after the refinery outages began, the NYMEX RBOB front month futures contract rose to a high of $2.17/gal on August 31, the highest price since June 2015.
Since peaking on August 31, prices have fallen, settling at $1.66/gal on September 15, but still remain unseasonably high. By comparison, the NYMEX RBOB front month futures contract settled at $1.43/gal on September 15, 2016.
Multi-week downward pressure on gasoline stocks
The gasoline inventory decline last week was a continuation of the recent downward trend in ARA gasoline storage, with stocks down a total of 369,000 MT since the week ending September 1. The consecutive draws moved gasoline storage levels to the lowest point since Genscape began monitoring the product.
Following the decreases the week of September 15, gasoline storage levels lowered to 1.108mn MT, and gasoline component stocks dropped to 411,000 MT.
![ARA Gasoline Storage]( "ARA gasoline storage levels from September 2016 to September 2017. Click to enlarge")
Similarly, naphtha stocks recorded a draw last week as well, down 9,000 MT to 565,000 MT.
Overall, the capacity utilization in ARA for all gasoline related products lowered 7 percent to 44 percent following the September 15 report draws.
Coinciding with the recent sizeable draws in ARA gasoline inventories was a 3.74mn-bbl, or 7 percent, decline in ARA crude stocks the week ending September 15. The decrease moved ARA crude storage 9.156mn bbls below storage levels one year prior.
On September 15, the ICE Brent Crude Oil Futures contract price closed at $55.62/bbl, up $9.03/bbl from one year prior, the highest closing price since April.
New York Harbor stocks mirrored the trend with substantial gasoline draws observed and storage levels down 1.859mn bbls the week ending September 8. The 13 percent draw was the largest reported since Genscape began monitoring NYH storage in 2013.
![New York Harbor Gasoline Stocks]( "NYH gasoline storage levels from September 2016 to September 2017. Click to enlarge")
Trans-Atlantic gasoline transfers match draw on stocks
Cargo movements out of Europe have been reflective of the increased gasoline demand following Hurricanes Harvey and Irma.
Shortly following Hurricane Harvey, several European-sourced gasoline cargos initially bound for West Africa and European ports rerouted to the U.S.
The week of September 8, gasoline shipped Trans-Atlantic via cargo reached 846,000 MT, and volumes of gasoline from Europe to the Americas rose to 1.132mn MT for the week ending September 15, which is the largest reported weekly total since the week of June 17, 2016.
Substantial gasoline cargo movements out of ARA storage terminals have been reflected in the storage data.
Oiltanking Amsterdam, the largest gasoline storage facility in the ARA region, with a total gasoline storage capacity of 799,000 MT, posted a 133,000 MT draw the week ending September 15, a 34 percent decline. During the time period between storage data collections, approximately 179,000 MT of gasoline was reported as loaded out of the location. This major decline moved storage levels at the location to the lowest point since Genscape began monitoring the product.
As of September 21, 425,500 MT of gasoline has already loaded with a further 333,000 MT fixed to be shipped Trans-Atlantic.
To date, much progress has been made since Hurricane Harvey to restore operations back to normal in the Texas Gulf Coast region. Following refinery restarts and a slowdown of exports from Europe, ARA gasoline inventory draws are likely to persist in the immediate future, however it is unlikely that they will continue at the substantial size seen in the most recent week.
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