LONDON: Diesel refining margins in northwest Europe rose on Wednesday as traders emptied Amsterdam/Rotterdam/Antwerp (ARA) storage tanks and fewer cargoes were expected to arrive in October from the United States and Russia.
US distillate stockpiles, which include diesel and heating oil, fell 1.9 million barrels, according to weekly data from the US Energy Information Administration (EIA) versus expectations for a 14,000-barrel decline.
Russia's exports of ultra-low sulphur diesel (ULSD) from the Baltic port of Primorsk in October will fall sharply to 806,000 tonnes, from a revised total of close to 1 million tonnes in September.
Traders are rapidly emptying diesel tanks in Europe's ARA storage hub as refinery maintenance lowers global production, offering a brief respite for the heavily oversupplied market.
Some 12 tankers have been chartered in recent days to carry nearly 400,000 tonnes of diesel out of the ARA hub to Mediterranean ports over the next two weeks, according to shipping data.
Refinery runs in Mexico have fallen to just 56 percent due to planned turnarounds, unplanned outages and a preference to export crude, according to analysts JBC Energy, resulting in higher demand for imported fuels, which increased by 36 percent year on year in August.
The demand in Latin America, along with falling US stocks, has limited distillates arbitrage to Europe to around 1.2 million tonnes in September, traders said.
GASOIL
Gasoil barges with a 0.1 percent sulphur content traded at an $8 a tonne discount to October diesel futures, the same as for the previous day's trades. * No cargoes traded.
No barges of 50 ppm gasoil traded. Offers were at a $5.50 fob ARA discount to October diesel, and bids at an $8 discount.
October Low-Sulphur Gasoil futures traded $6 a tonne higher at $416 a tonne at 1529 GMT.
The October contract traded at a discount of $1.50 a tonne to the November contract, unchanged from the previous day. * Benchmark diesel refining margins stood at $9.88 a barrel, up from $9.55 a barrel.
DIESEL Barges of 10 ppm diesel changed hands at discounts of $1.50-$2 a tonne fob ARA to October diesel futures, equal to Tuesday's trades.
No cargoes traded.
JET FUEL
No jet fuel barges traded. Litasco offered jet fuel at a $19 a tonne premium above October diesel, while Trafigura bid at the same premium.
That compared with trades on Tuesday at a premium of $17 a tonne fob ARA.
Shell sold to Trafigura a 30,000 tonne cargo basis Rotterdam, most of it priced at a $20.50 a tonne premium to October diesel futures.
FUEL OIL
No trades were reported for barges of 3.5 percent sulphur content fuel oil.
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