LONDON: Northwest European refining margins inched higher on Tuesday despite excess supplies as crude oil futures fell.
Exports to Europe from the United States, Asia and the Middle East are expected to be limited in the coming months due to mostly closed arbitrage, traders said.
BP intends to shut down part of its 266,000 bpd Gelsenkirchen refinery in Germany in August. * Some current and planned maintenance is also expected to curtail distillate supplies.
A distillate-producing hydrocracker at Preem's 220,000 bpd Lysekil refinery in Sweden was expected to restart this month after nearly five months of extended maintenance, market sources said.
Russia's exports of ultra-low sulphur diesel (ULSD) from the Baltic port of Primorsk in August will rise by 1.0 percent to 1.038 million tonne from a planned 1.028 million tonnes in July.
Shipments of crude and refined oil products from Georgia's Black Sea port of Batumi fell 11.8 percent year on year in the first seven months of 2016, a senior official at the terminal said on Monday.
Still, an excess of distillates in storage tanks in Europe's ARA hub have kept a lid on prices and margins.
GASOIL
Barges of 0.1 percent sulphur gasoil traded at $4.50-$5 a tonne fob ARA discounts to August diesel.
Barges of 50ppm sulphur gasoil traded at $4.50 a tonne discounts.
August Low Sulphur Gasoil futures were trading $2 lower at $355.25 a tonne at 1542 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 $7.88 a barrel, up from $7.72 a barrel Monday.
DIESEL
Barges of 10 ppm diesel traded at discounts of $3 to $5 a tonne fob ARA to August diesel futures, compared with discounts of $5 a tonne on Monday.
No cargoes traded.
JET FUEL
No barges of jet fuel traded during the afternoon session.
Trafigura bid at a $23 a tonne fob ARA premium to August diesel futures, while Glencore and Litasco offered at $27.50-$28 a tonne above August.
This compared with trades at $24 and $26 a tonne fob FARAG premiums to August diesel futures on Monday.
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 $198.25-$202 a tonne fob ARA, down from $203.75-$207.50 a tonne on Monday.
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