Oil product barges bringing oil products up the Rhine from the Amsterdam-Rotterdam-Antwerp hub into Germany are facing delays of up to a week to discharge in some locations as water levels have passed high water flood marks this week due to heavy rainfall and melting snow, according to industry sources.
"Issues with Rhine water levels depend on location, at Duisburg the Rhine is very high, we have to wait a few days to discharge," a diesel trader said Thursday. "In Duisburg where we want to discharge, level is 8 meters -- hopefully we can discharge Wednesday or Thursday next week," he added.
According to German waterways authority WSV, Rhine levels at the key chokepoint of Kaub had risen to 5.46 meters at 1200 GMT Thursday, up from just 1.56 meters on January 31. At Koblenz, where local media has reported flooding in the city with the river flowing over the embankments, WSV reported water levels at 5.46 meters at 1200 GMT Thursday. In Cologne, water levels had reached 7.99 meters. "The Rhine has been shut down from Koblenz onwards," another diesel trader said.
According to industry website Rhineforecast.com, water levels at Kaub were due to rise to around 5.50 meters Thursday before slipping to around 4 meters on February 11 and rebounding to around 5.50 meters on February 16. High water levels hinder barges operations when they reach 4.60 meters at Kaub, according to Rhineforecast.
Meanwhile at Cologne, Rhine water levels are nearing 8 meters and are expected to fall back to around 6 meters on February 11 before rising again to around 8 meters on February 16, according to Rhineforecast.
"It traps the oil in ARA," a third diesel trader said. Outright prices of 50 ppm gasoil and ultra-low sulfur diesel barges in the Amsterdam-Rotterdam-Antwerp trading hub recently dropped to two-year lows on expectations of demand destruction due to the coronavirus outbreak in China. Market participants said this sharp fall in prices was bound to boost consumption of heating oil in Germany and Switzerland.
European demand for heating oil has been particularly weak in January in Europe due to unseasonably mild temperatures. "Now we believe demand will be massive. The drop in flat prices has led to a lot of buying. German end-users have big tanks," a fourth trading source said on Thursday.