Total crude oil stock inventories in the ARA region – the world’s largest oil trading hub – have reached a record high according to Genscape.
Since the market insight and intelligence company started monitoring the north European hub in July 2013, stocks have reached 60.62 million barrels as of June 19, 2015.
Total ARA crude oil inventories increased seven times over the past 11 weeks, rising by 10.06 million barrels since April 2015.
Analysis by Genscape shows that while the market contango flattened out, storage inventories continued to rise.
It is thought that the stocks in storage currently were committed during the deeper parts of the contango price curve, before it started to flatten out.
The price of Brent crude has since rebounded by $15 per barrel since January 2015. Those barrels in storage could be released back into the market soon, swelling the glut of oil in the Atlantic basin.
Of the 202 tanks monitored, only 12 of the 176 operational tanks are using less than 15% of the tank’s total working capacity. Only five are utilising less than 10% of capacity. This compares to 18 of the 171 operational tanks at 15% of less a year ago,
A total of 77 active tanks are using 85% or more of their capacity, compares to 50 operations tanks at the same level a year ago.
The analysis further supports comments from market experts who have said that storage available for hire is scarce in the ARA region. As previously reported in Tank Storage Magazine back in March, Charles Smissaert, general manager at Botlek Tank Terminals said that the contango has transformed the storage market and ‘not a single tank is available in Rotterdam’. Additionally, various storage facilities globally are almost full, according to Platts.
However Genscape warns that stock growth could reverse in the future if the ICE Brent forward curve continues to flatten out.