Europe Distillates/Fuel Oil-Mild weather depresses gas oil

Wed Nov 18, 2009 11:50pm IST

 LONDON, Nov 18 (Reuters) - The forward curve of Europe's
middle distillate benchmark ICE gas oil futures remained in a
steep contango, as warm weather continued to depress demand for
heating oil from Germany.
 Traders said middle distillate volumes in floating storage
are expected to rise to almost 100 million barrels in December.
[ID:nSP42555]
 "You've got a very depressed cash market and very warm
weather -- Europe needs to experience a very big bout of cold
weather to get the heating oil market moving with German stocks
so high," one trader said.
 "The high levels of floating storage are going to act as a
break on this market -- distillates can stay at sea for a very
long time without any reduction in quality, and when some
contracts come to the end of their time offshore more product is
getting rolled off to replace them."
 Fuel oil prices in Europe rose on Wednesday, boosted by
strong demand from shipping firms amid signs of a pick-up in the
wider economy.
 
 ICE GAS OIL
 * December gas oil futures LGOc1 were $638.75.00 a tonne,
up 1.12 percent by 1734 GMT.
 * The contango to January was around $11.25 a tonne, firm
from Tuesday and close to its widest level since early August.
LGO-1=R NEWOILOIL
 * The prompt crack eased about 20 cents to $7.65 a barrel.
LGO-LCO1=R
 * Brent crude futures LCOc1 rose 57 cents to $79.54 a
barrel.


 GAS OIL
 * Traders said relatively warm weather in Germany was
dampening sentiment in the inland market.
 * Swaps showed no signs of recovery in the differentials,
with December at discounts of around $9/$10 a tonne fob ARA to
benchmark and $7.50/$8.50 discounts for January for the second
day running.
 * Barges of gas oil with 0.1 percent sulphur were offered at
discounts of $10 a tonne fob ARA to December ICE gas oil futures
and bid at $11 discounts, compared with deals at $6/$8 discounts
on Tuesday.
 * In mid-November last year, gas oil barges traded around
 $0.50/$5 premiums to benchmark.
 * In the Mediterranean, 0.1 percent sulphur was bid at
December plus $5 a tonne cif, unchanged from Tuesday's deals.
 * The East/West spread swaps were $2.50/$3.50 premiums for
Europe in December, suggesting the arbitrage imports from Asia
may be limited on paper.
 
 DIESEL
 * In the Mediterranean, Eni continued to be on the buy side.
It was bidding the French winter spec at December plus $13 a
tonne cif, for the second day running.
 * The French winter spec in Northwest Europe has remained at
slight discount to the Mediterranean since late last week. UK
spec was bid relatively actively at around plus $19 a tonne cif.
 * French winter spec was bid at December plus $12.75 a tonne
cif NWE, up $1.75 from Tuesday.
 
 JET FUEL
 * Jet cargoes were discussed between plus $49 and plus $53
CIF Rotterdam. Barges were discussed at December plus $42 and
$44 a tonne fob ARA, steady from Tuesday.
 * Swaps rose about $1 across the curve for the second day,
with December at $49.50/$50.00 a tonne cif and $51.50/$53.50
  FUEL OIL <EURO/DIFF/FO>
 * High sulphur fuel oil (HSFO) barges with 3.5 percent
sulphur traded at $459-$461 a tonne fob ARA, compared with
$452-$454 on Tuesday.
 * HSFO's crack to dated Brent was a little stronger at minus
$5.75 a barrel from minus $6 a barrel on Tuesday.
 * Fuel oil with 1 percent sulphur traded at $486 a tonne
while 1.5 percent fuel oil traded at $479 a tonne. Both were up
by around $7 on Tuesday's levels.
 (Reporting by David Sheppard; Editing by Sue Thomas)










Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage