LONDON, Aug 21 (Reuters) - Distillate product markets were steady on Tuesday, supported by the lack of arbitrage opportunities from Asia and the U.S. and limited production capacity in Europe due to upcoming refinery maintenance. "The reality is that demand is not very exciting, but there is not enough product. The arbitrage window is missing, both from Asia and from the U.S.," said one distillates trader. Demand in the Mediterranean was seen to be firmer than in the north because Turkey along with other countries in the East were buying both diesel and gasoil. The Mediterranean physical market was now on a par with northwest Europe, traders said, although swaps in the north were still higher than in the south. Refining margins were steady on the day, hovering near $17.70 a barrel on the ICE platform during the session. Higher margins in the second quarter helped revive refinery output in Europe, supporting further increases in processing rates. Output at European oil refineries rose again in July, after increasing by 3.1 percent in June, as producers continued to take advantage of wider margins for diesel and gasoline, figures from industry monitor Euroilstock showed on Tuesday. Total net refinery output was up 1.5 percent in July from the previous month, with middle distillates output rising by 1.8 percent. The refinery maintenance season starts again in September, when many plants in the region will undergo scheduled work that will limit capacity and potentially reverse recent increases in refinery output rates. GASOIL * Gasoil barge premiums were unchanged for a sixth session, with Vitol selling a barge to Statoil at a discount to September ICE gasoil futures of $4 a tonne. * September ICE gasoil futures were up 0.79 percent at $986.75 a tonne at 1809 GMT. * The front of the ICE gasoil curve remained slightly backwardated, with the September/October spread trading at minus 50 cents a tonne. * The ICE gasoil crack was at $17.70 a barrel, 1 cent higher than the previous close. * In the Mediterranean, three firms were seen bidding for cargoes while two firms offered. * One bid was at $9 a tonne over October ICE futures, while the bid/offer spread for cargoes quoted against mean cif Med prices was minus $5/$2 a tonne. DIESEL * Diesel barges were little changed on Tuesday, trading at $29 a tonne over September ICE gasoil futures, in line with the previous day's $28-$29 a tonne fob ARA premiums. * Morgan Stanley bought from BP and North Sea Group bought from P66. * No barges of 50ppm diesel traded. On Monday, prices were at $14-$15 a tonne over September futures. * No cargoes traded. In the Mediterranean, Total bid at $35 a tonne over September futures, while Shell also bid for a cargo. No offers were seen. Premiums were little changed from Monday. * In the north, SK Energy bid for a cargo at $35 a tonne over September futures basis Le Havre in France. JET FUEL * No barges traded. Shell bid at CCM minus $2.25-$2.50 a tonne, while BP offered at CCM minus $2 a tonne. * On Monday, barges were slightly lower, trading at $78 a tonne over September ICE gasoil futures and CCM minus $3.00 a tonne. * No cargoes traded. Vitol and BP offered at $82 a tonne over September futures, while Morgan Stanley bid up to premiums of $84 a tonne and Total bid up to premiums of $83 a tonne over September futures. * Premiums for cargoes in the region were little changed from Monday. FUEL OIL * Barges of low-sulphur fuel oil (LSFO) with 1 percent sulphur content were discussed at $711-$714 a tonne fob ARA, up from $706.50 a tonne fob ARA on Monday. * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent sulphur traded at $651-$653.25 a tonne fob ARA, up from $641.50-$644 a tonne fob ARA on Monday.