Dirty and Clean Products

The Fuel Oil storage market is weak. Many players have returned their tanks in NWE, leaving a lot of capacity not utilized. It is not an easy decision mainly due to the high cleaning costs. But some projects look very viable. The front of the gasoil market has been rolling up in contango for a few months now and currently stands at -2.50, making short term diesel storage plays a little more attractive.

But storage terminals have to become more aggressive with their fees to make these kind of plays work. Storage fees of 2 Eur/cbm seem to be support right now and there are little signs that terminals will go below. As in the fuel storage market, we see some grades of biodiesel that can be stored in gasoil tanks, alleviating the pain somewhat for terminals with unused gasoil capacity. The Jet market is strong and European refiners are shifting their yields towards maximum output, which has led to increased storage requests for this product. Rates for jet storage are firm and the exception in the distillates storage market.

The demand for Gasoline tanks has been strong especially for smaller tank sizes(10-15.000M³). Storage rates for clean products are on the lower side of the “average” but showed a slight raise in the beginning of 2018. At the moment, with the front of the gasoline curve flat and the winter/summer spread around break-even, we will probably see less interest the coming weeks and we will probably dip somewhat again.

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