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Europe Distillates-Diffs dip on weak demand
March 20, 2012 / 5:17 PM / in 6 years

Europe Distillates-Diffs dip on weak demand

LONDON, March 20 (Reuters) - Gasoil and diesel barge
differentials in northwest Europe softened slightly on Tuesday,
dogged by weak regional demand, although reduced supply due to
refinery maintenance and run cuts helped balance the market.	
    "The demand in northwest Europe is poor and at current
prices will remain poor," said Olivier Jakob, oil analyst at
Petromatrix in Switzerland. "Support has to come more from the
supply side than the demand side."	
    Traders said the crude distillation unit at BP's 400,000
barrel-per-day Rotterdam refinery is still offline after a fire
in the early hours of Monday morning. 	
    Jakob said that over the last few days refinery margins had
begun to recover but that once refineries move out of
maintenance, production will increase whilst demand will stay
what he termed as "sloppy". 	
    One bright spot was that France's emergency stocks agency
said it would seek more diesel through a tender to ensure it
reaches the 18 million tonnes of emergency oil stocks that
France is required to hold. 	
    * No gasoil barges traded in the window, but a broker said
that bids and offers came at discounts to April ICE gasoil
futures of $3-$5 a tonne fob ARA, softening a little from
Monday's discount of $3 a tonne.	
    * April ICE gasoil futures were down 1.05 percent at
$1,032.25 a tonne at 1638 GMT.	
    * The ICE gasoil crack LGO-LCO1=R was at $14.36 a barrel,
pretty much unchanged from Monday.	
    * April/May LGO-1=R was in a slight contango of 25 cents a
tonne, compared with a backwardation of $2 a tonne on Monday as
the curve continued to flip-flop.	
    * No 50 ppm German specification gasoil barges traded, but a
broker said bids and offers came at premiums to April ICE gasoil
futures of $6-$11 a tonne fob ARA, compared with Monday's trades
at premiums of $8 a tonne. 	
    * Ten diesel barges changed hands at premiums to April ICE
gasoil futures of $17-$17.50 a tonne fob ARA, down from Monday's
premiums at $18-$18.50 a tonne.	
    * Statoil, Cargill, North Sea Group, Hetco and
ConocoPhillips were on the sell side. BP bought eight of the
barges whilst Litasco bought the other two.	
    * No cargoes traded.	
    * One barge traded in the window at a premium to April ICE
gasoil futures of $66 a tonne fob ARA, unchanged from Monday's
level. Litasco sold the barge to BP.	
    * BP sold a cargo to Shell. 	
    * The International Air Transport Association has cut its
forecast for global airline profits this year due to a sharp
rise in oil prices, saying a spike to $150 per barrel could lead
to losses as high as $5.3 billion. 	
    FUEL OIL 	
    * Barges of low-sulphur fuel oil (LSFO) with 1 percent
sulphur content traded at $756-$758 a tonne fob ARA, in a
tighter range than Monday's price discussion of $754-$761 a
    * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent
sulphur content traded at $702.50-$705 a tonne fob ARA, slipping
from Monday's $712.50-$715 a tonne range.	
 (Reporting by Claire Milhench; additional reporting by Zaida
Espana, editing by Jane Baird)

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