April 5, 2012 / 2:42 PM / 6 years ago

Europe Distillates-Prices fall in thin trade

LONDON, April 5 (Reuters) - European trading activity in
distillates thinned on Thursday ahead of the Easter break, with
diesel differentials slipping further to erase gains made
earlier in the week.	
    Gasoil refining margins also slipped, eroded by gains in oil
prices, partly driven by fears that Iranian oil supplies would
be disrupted further after a major Chinese ship insurer said it
would halt indemnity cover for tankers carrying Iranian oil.	
    A surprise build in distillate stocks in the U.S. this week
has helped revive bearish sentiment in gasoil and diesel. Signs
demand across the Atlantic is dropping sharply - by as much as 5
percent on the year accorsing to a U.S. government report - is
also dampening prices in Europe. 	
    However, a cut in deliveries from Russia and a lack of
arrivals from Asia could add pressure to the market, as the
window for deliveries from the East is difficult to work and few
cargoes are likely to arrive this month, based on bookings made
so far.	
    Exports of ultra-low sulphur diesel from Russia's Baltic
port of Primorsk will be more than halved in April due to
refinery maintenance work, sources at oil companies said.  	
    Primorsk is the country's main export outlet for the clean
    * One gasoil traded in the window, with Gunvor buying from
Glencore at a $3 a tonne discount to April ICE gasoil futures,
down from a discount of $1.75 a tonne fob ARA on Wednesday.	
    * Activity was limited as participants made preparations for
the long Easter bank holiday weekend and were absent from the
    * One barge of 50ppm gasoil traded at $8 a tonne over April
ICE gasoil futures, in line with prices on Wednesday. 	
    * There were no bids or offers in the cargo market in the
NWE region.	
    * The cargo market was busier in the Mediterranean, with
Gunvor and Total each offering cargoes of Spanish summer quality
gasoil. Glencore bid at $1 a tonne over mean Med quotes.	
    * April ICE gasoil futures were down 0.74 percent at
$1,005.25 a tonne at 1145 GMT.	
    * The ICE gasoil crack LGO-LCO1=R slipped to $12.45 a
barrel, down from $13.77 a barrel at the close on Wednesday.	
    * The April/May LGO-1=R spread moved into a wider contango
of $1.75 a tonne, out from $1.25 a tonne at the close on
    * There was also little activity in the diesel barge window
on Thursday ahead of the Easter break. Just two barges changed
hands, compared with Wednesday's ten.	
    * North Sea Group bought from Cargill at $22 a tonne
premiums to April ICE futures, while Omneo bought from Litasco
at $20 a tonne over April ICE futures.	
    * Prices were lower than Wednesday's $22-$23.50 a tonne fob
    * Glencore bid for a cargo of UK summer specification
diesel, while there were no offers in the market.	
    * Vitol offered cargoes of French summer specification
diesel in the Mediterranean at $27 a tonne over May ICE futures.	
    * There were no trades in the barge or cargo jet fuel market
on Thursday. 	
    * In the cargo market, BP bid at $73-$75 a tonne over May
ICE futures, while Total bid at $75 a tonne premiums and Morgan
Stanley bid at $76-$77 a tonne premiums.	
    * Vitol was the only party offering cargoes, at various
dates in April at premiums of $75-$76.50 a tonne.	
    * The resulting bid/offer spread on Thursday was largely in
line with prices the previous session.	
    FUEL OIL 	
    * Barges of low-sulphur fuel oil (LSFO) with 1 percent
sulphur content traded at $752-$760 a tonne fob ARA, slightly
lower than Wednesday's $761-$761.50 a tonne fob ARA.	
    * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent
sulphur content traded at $685-$688.50 a tonne fob ARA, down
from $691.75-$694 a tonne fob ARA on Wednesday.	
 (Reporting by Jessica Donati; Editing by Anthony Barker)

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