News of Russia oil reserve having little impact on Europe refined products

15 July 2011 14:01  [Source: ICIS news]

LONDON (ICIS)--The European refined product markets have been little affected by the Russian government's plans to create a domestic oil product reserve system, sources said on Friday.

The reserve is designed to guard against fuel shortages, which some areas of Russia faced in April and May. Russia’s energy minister Sergei Shmatko said on Wednesday that he expects real steps in creating fuel reserves to be started in July to August, adding that the total volume of fuel reserves could be up to 2m tonnes.

The reserve system would likely diminish the quantities of material available to the rest of Europe. Key products targeted for storage by the country are thought to include diesel, jet fuel and gasoline.

“We’ve not seen any impact yet,” said a source in the gasoline industry. “We cover the strategic stocks market here and no one is talking about it yet.”

A broker in the jet fuel barge market who was asked about the effect of Russia’s decision, added: “Not that we have seen. I’m not sure it will have too much impact, to be honest.”

“There’s less material coming out of Russia. Premiums are slightly up,” a naphtha trader said.

However, other sources in the naphtha market had not noticed any impact so far.

Diesel market participants had also not yet observed any effects.

“We have not seen much to suggest it has had any effect yet,” said a gasoil and diesel broker.

The fuel shortages suffered by some regions of Russia in April and May were brought about by an increase in fuel exports.

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By: Jo Pitches
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