Vitol books tanker to store 1 million barrels of gas oil in Europe

SINGAPORE: European trader Vitol has chartered a ship to store up to 1 million barrels of gas oil in Europe, industry sources said on Monday.

The Geneva based trading firm, has leased the tanker Ellie Lady to begin loading operations later this week, shipping sources said.

"The duration of the storage charter is likely to be between 30-60 days," an Asian based shipbroker said.

Vitol was expected to be storing 10ppm sulphur gas oil on the vessel due to improved demand for the fuel from Germany and Turkey on colder than normal temperatures, traders said.

"The weather has been unusually cold, and demand remains fairly robust, particularly from Germany and Turkey," a Singapore-based trader said.

Demand for low-sulphur grades have surged over the last few months in Germany, Europe's top heating oil market, after higher tax rates were introduced on 0.1 percent sulphur heating fuel to cut greenhouse gas emissions.

In the Mediterranean, demand for low-sulphur gas oil has also jumped, bolstered by Turkey's impending switch to lower-sulphur fuel grades by early next year.

Around 2.5 million barrels of the 10 ppm fuel has already been shipped from Asia to the West.