LONDON: Diesel differentials widened on Wednesday following the expiry of the ICE April gasoil contract and liquidity rose sharply in the afternoon window.
Lower inventories in the United States continue to support the European diesel market as they stifle transatlantic imports from the US Gulf.
US distillate stockpiles, which include diesel and heating oil, fell by 2.2 million barrels last week, versus expectations for a 885,000-barrel drop, Energy Information Administration data showed on Wednesday.
High freight rates were also keeping arbitrage closed from the US Gulf Coast, and limited to around 1 million tonnes in April, according to traders.
Deliveries of low-sulphur gasoil for April rose to 3,340 lots, or 334,000 tonnes, InterContinental Exchange data showed on Wednesday.
The contract expired at $501.25 a tonne, up from $464.25 at March's expiry, when deliveries reached 1,875 lots.
Indian Oil Corp IOC.NS is offering up to 236,000 tonnes of gasoil for loading over May to August, a tender document shows.
GASOIL
Four barges of 0.1 percent sulphur content gasoil traded at $11-$12 a tonne discounts to May diesel futures, stronger by $1 a tonne from discounts on Tuesday. Vitol, BP and Litasco sold to AOT.
No barges of 50 ppm gasoil traded. A bid emerged at a $7 a tonne discount to May diesel futures, compared with trades on Tuesday at $5-$5.50 a tonne discounts to the same benchmark.
May ICE Low Sulphur Gasoil futures were up $3.50 a tonne $498 at 1603 GMT.
Benchmark diesel refining margins against the expired April contract were at $11.17 a barrel, up from $10.90 a barrel on Tuesday.
The expired April contract traded at a $3 a tonne discount to the May contract, compared to a contango of $1.75 a tonne on Tuesday.
DIESEL
Fifteen barges of ULSD traded at $1.25-$2 a tonne discounts to the May diesel futures contract, compared with three trades on Tuesday at flat to discounts of 50 cents a tonne to the April benchmark. Unipec, Total and Vitol sold to BP, Glencore, Gunvor and Hartree.
Petroineos sold one cargo to BP cif Sete at a $7 a tonne premium to May diesel futures.
JET FUEL
No barges traded.
Noble sold a cif Le Havre cargo to Shell at a $3 a tonne discount to published prices.
FUEL OIL
Barges of 3.5 percent sulphur fuel oil traded at $298.25-$299.50 a tonne fob ARA, compared with trades at $297-$297.75 a tonne on Tuesday.
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