LONDON: Diesel barge differentials in northwest Europe rose for a fourth straight session to a two-week high as upcoming refinery maintenance raised expectations for tighter supplies.
US distillate stockpiles, which include diesel and heating oil, rose last week by 122,000 barrels, versus expectations for a 400,000-barrel increase, EIA data showed.
Concerns that a tropical storm in the Caribbean will reach hurricane strength before it hits the US Gulf Coast supported the market. * Oil refiners reeling from tumbling profits can expect some reprieve in the coming weeks as lower production will tame a huge global excess of gasoline and diesel.
Seasonal maintenance in Europe is expected to peak in mid September at around 1 million bpd, according to traders and Reuters data, significantly lower than last year's 2.3 million bpd.
As a result, diesel gasoline stocks are expected to fall in September by 4 to 6 million barrels, according to consultancy Energy Aspects.
The arbitrage from the US Gulf Coast was closed for most traders, although several cargoes have been booked in recent days on the route, according to traders and Reuters shipping data.
Several tankers have been booked to ship diesel out of northwest Europe to the Mediterranean due to strong demand from Turkey, where the Izmit refinery's hydrocracker remained shut for unplanned maintenance.
Three barges of 0.1 percent sulphur content gasoil traded at discounts of $7-$8 a tonne fob ARA to the September Low Sulphur Gasoil futures.
No cargoes traded.
Three barges of 50ppm sulphur gasoil traded at discounts of $5-$6 a tonne fob ARA to the September diesel futures.
September Low-Sulphur Gasoil futures traded $8 a tonne lower at $432.25 a tonne at 1548 GMT.
Benchmark diesel refining margins stood at $9.77 a barrel, slightly lower than a day earlier.
The September contract traded at a premium of $4.50 a tonne to the October contract, 50 cents narrower.
DIESEL
Around 20 barges traded at discounts of $2.75-$4 a tonne fob ARA to September diesel futures, compared with $4-$6.25 a tonne discounts on Tuesday.
No cargoes traded.
JET FUEL
No barges traded. Bids and offers came in at premiums of $23-$24 a tonne cif NWE above the September diesel futures.
No cargoes traded.
FUEL OIL
Barges of 3.5 percent sulphur content fuel oil traded at $235-$235.50 a tonne fob ARA, compared with $240-$242 a tonne.
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