LONDON: Diesel barge differentials in northwest Europe rose on Friday, as supplies were expected to tighten with lower imports and regional production affected by refinery maintenance.
Demand remained strong due to storage filling and cold weather, traders said.
The planned shutdown for maintenance of Germany's 310,000 barrels per day (BPD) Karlsruhe refinery later this month has increased concerns of supply tightness in February and March, traders said. Relatively low imports from the US Gulf Coast of around 700,000 tonnes and uncertainty over the arbitrage from the Middle East and Asia have further supported the market.
Traders said the arbitrage from the United States was closer to opening following a recent slump in US prices. "But if it is unworkable for another two weeks, Europe will definitely see support for diesel, as we hit maintenance, and with 1 million barrels per day offline soon and closed arb from the United States will add support to cracks."
ARA gasoil stocks, which include diesel, hit a 16 year high this week following a period of intense stockpiling by traders.
Data from Dutch oil consultants PJK International showed gasoil inventories rising to 3.065 million tonnes in independent storage at the Amsterdam-Rotterdam-Antwerp pricing hub, the highest level since March 1999.
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