European storage adjusts to IMO 2020

There are signs that European operators and refiners are getting comfortable with inventory levels ahead of the IMO 2020 switch

Europe's steady oil consumption has provided a firm underpinning to oil storage activity this year, as the market adjusted to expectations of a significant change in product consumption patterns with the implementation of the International Maritime Organisation's (IMO) 2020 reduction in marine fuel sulphur specifications, and the arrival of increased volumes of US crude. These two factors appeared to compensate for market backwardation—the spot price exceeding forward prices—which discourages speculative oil storage. Royal Vopak, the world's largest independent liquids storage company, reported in its analyst presentation for the first half of 2019 that in the second quarter occupancy at its