March 14, 2012 / 5:27 PM / in 6 years

Europe Distillates-Diesel edges higher

LONDON, March 14 (Reuters) - Diesel differentials in
northwest Europe edged up again on Wednesday, supported by lower
refinery runs, particularly in the tight Mediterranean market,
refinery outages and a slight pick up in German demand.	
    Planned maintenance was underway at the Ineos Grangemouth
refinery in Scotland, with the closure of a CDU earlier this
week. The refinery has the capacity to process
210,000 barrels of crude oil a day, with diesel accounting for
some 24 percent of the output.	
    Traders added that northwest Europe differentials were
bouyed by the tightness in the Mediterranean market as the
simple refineries there have cut runs. 	
    "With the high crude price their margins have been coming
down," said one diesel barge trader. However, he saw some of the
tightness easing soon as more arbitrage cargoes are coming from
Asia and the United States. 	
    The Energy Information Administration said that U.S.
distillate stockpiles fell 4.68 million barrels week-on-week,
far more than analysts' consensus forecast for a 1.3 million
barrel draw.	
    Phil Flynn, an analyst at PFGBest Research in Chicago, said
the decline was most probably caused by rising diesel exports. 	
    One trader also reported hearing of a pick up in demand from
Germany, although these are still quite small volumes. 	
    "They have started slowly purchasing - until this happened
we were never going to see diesel gain any real momentum," he
said. "Sentiment is definitely shifting - we can see this in the
paper, which is well bid."	
    	
    GASOIL 	
    * Two gasoil barges traded in the window at discounts to
April ICE gasoil futures of $3.50-$4 a tonne fob ARA, firming
slightly from Tuesday's discounts of $4 a tonne.	
    * Mercuria bought both the barges from China Oil Hong Kong.	
    * April ICE gasoil futures were up 0.41 percent at
$1,040.75 a tonne at 1642 GMT.	
    * The ICE gasoil crack LGO-LCO1=R was at $13.66 a barrel,
up from $12.61 a barrel on Tuesday.	
    * April/May LGO-1=R was in a contango of just $1 a tonne,
narrowing from a contango of $2.50 a tonne on Tuesday. 	
    * No 50 ppm German specification gasoil barges traded. 	
	
    DIESEL ULSD10-BD-ARA	
    * Six diesel barges traded at premiums to April ICE gasoil
futures of $19.50-$21 a tonne fob ARA, edging up from Tuesday's
premiums of $18.50-$20 a tonne.	
    * Fina, Morgan Stanley and DS Mineraloel were on the buy
side, whilst Glencore, Vitol and ConocoPhillips were sellers.	
    * No cargoes traded in the window.	
        	
    JET FUEL JET-BD-ARA	
    * No jet fuel barges traded in the window, but bids and
offers came at premiums to April ICE gasoil of $65-$72 a tonne
fob ARA. This was in line with Tuesday's trades at $69 a tonne. 	
    * No cargoes traded in the window.	
    	
    FUEL OIL 	
    * Barges of low-sulphur fuel oil (LSFO) with 1 percent
sulphur content traded at $757-$761 a tonne fob ARA, slipping
from $762-$770 a tonne on Tuesday.	
    * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent
sulphur content also traded down at $711.50-$714 a tonne fob,
from $719-$723 a tonne in the previous session.	
	
 (Reporting by Claire Milhench, editing by William Hardy)

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