Europe Distillates-Diffs hold strong on limited supplies

LONDON: Diesel barge differentials in northwest Europe edged higher on Monday as limited imports into the region and strong demand from the Mediterranean supported. 
Prices in the ARA hub remained supported by limited availability due to weaker imports. Most buying was done to meet demand in the ARA region while inland barge buying remained slow, traders said. 

The arbitrage from northwest Europe and the Baltics to the Mediterranean was open, with several cargoes booked in recent days on the route. 

The Mediterranean market remained tight due to limited imports and high refinery maintenance. Demand in North Africa was strong after Algeria's state-run oil company Sonatrach issued a tender to buy 3 cargoes, or 90,000 tonnes, of 0.1 percent sulphur content gasoil in June. 

Russian refiner Surgutneftegaz has awarded a tender to Vitol for up to 2.5 million tonnes of ultra-low sulphur diesel (ULSD) from the Baltic port of Primorsk in July-December 2017, traders said on Tuesday. 

China's April refinery throughput fell to its lowest level on a daily basis since last September as some large state-owned refineries conducted planned oil plant maintenance and crude oil output continued to drop. 

GASOIL 

Barges of 0.1 percent sulphur content gasoil traded at discounts of $10 a tonne fob ARA to the June Low Sulphur Gasoil futures. 

No cargoes traded. 

No barges of 50 ppm gasoil traded. 

June diesel futures were trading $9 a tonne higher at $457.75 a tonne at 1534 GMT. 

The June contract was trading at a discount, or contango, of 75 cents to the July contract. 

Benchmark margins for diesel stood at $9.46 a barrel, little changed. DIESEL 

Ten diesel barges traded at premiums to the June gasoil contract of 25 to 50 cents a tonne fob ARA, slightly higher than Friday's trades. Gunvor, Litasco and Vitol sold to BP and Koch. 

In the Mediterranean, Noble sold to Glencore a cargo at a premium of $8.50 a tonne cif Naples to June diesel futures. 

JET FUEL 

Three barges traded at premiums of $22-$23 a tonne fob ARA to the June diesel futures. Shell and KLM sold to Vitol. 

No cargoes traded. 

FUEL OIL 

Barges of fuel oil with a sulphur content of 3.5 percent traded at $282.75-$283.25 a tonne fob ARA, up from $272.25-$273 a tonne on Friday. 

  

Copyright Reuters, 2017