Additionally, ultra-low water levels on the Rhine river are keeping these products from sailing out of storage and into Europe's industrial heartland.

"Unless it starts raining, I do not know where it can go but stay on the water," a distillates trader said of any pending cargoes.

Despite this, refineries have not yet shown any signs of cutting back their output. Rather, falling Brent crude prices are encouraging them to keep the taps flowing unchecked - a development likely to put even more pressure on storage, ships and oil prices.

"Margins have improved as the dated Brent market continued to slump," one trader said. "I don't think we will have run cuts for a while."

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