LONDON: Northwest European refining margins firmed on Wednesday despite a surprise build in US inventories last week as traders expected reduced imports into the region.
US distillate stockpiles, which include diesel and heating oil, rose by 1.2 million barrels last week, versus expectations for a 500,000 barrel drop, data from the US Energy Information Administration showed on Wednesday.
The data also showed refinery crude runs were up by 266,000 barrels-per-day, and refinery utilization rates rose by 0.9 percentage points.
Exports to Europe from the United States, Asia and the Middle East are expected to be limited in the coming months due to weak European prices, traders said.
Vitol was offering a 110,000 tonne diesel cargo from the Baltic port of Ventspils on board the SKS Delta for prompt delivery into ARA, traders said.
Diesel cargo offers in the Mediterranean were difficult to come by, traders said, as demand remained subdued.
While a string of refineries have trimmed runs amid the glut of products, an internal memo revealed that Delta's Trainer refinery is flooding the east coast market with jet fuel in a bid to keep it affordable for its airline parent company.
US downstream firm Phillips66 has agreed to sell Ireland's 75,000 bpd Whitegate refinery to Canada's Irving Oil.
The deal is expected to be completed by the end of the third quarter and Irving agreed to continue running the refinery.
GASOIL
No barges of 0.1 percent sulphur content gasoil traded. * No barges of 50ppm sulphur gasoil traded.
August Low Sulphur Gasoil futures were trading $7.75 a tonne higher at $365 a tonne at 1541 GMT.
The August contract traded in a contango of $6.75 a tonne to the September contract, unchanged.
The diesel refining margin was at around $8.15 a barrel, up from $7.88 a barrel on Tuesday.
DIESEL Barges of 10 ppm diesel traded at discounts of $2 to $3 a tonne fob ARA to August diesel futures, compared with $3 to $5 a tonne discounts on Tuesday.
No cargoes traded.
JET FUEL
KLM sold a barge to Noble at a $24 a tonne premium to August diesel futures.
No cargoes traded. BP and Total bid while Vitol offered.
FUEL OIL
Barges with a sulphur content of 3.5 percent fuel oil traded at $199-201 a tonne fob ARA, little changed.
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