LONDON: Diesel refining margins in northwest Europe rose slightly on Tuesday boosted by a closed arbitrage into the region from the United States and strong demand.
High freight rates were keeping arbitrage closed from the US Gulf Coast, and limited to around 1 million tonnes in April, according to traders.
Heavy refinery maintenance in Asia this month was also limiting the overall amount of available diesel, though arrivals this month from the Middle East and Asia were expected to remain stable at 1.5 million tonnes.
Crude oil intake at Europe's refineries in March fell 0.6 percent compared with February to 10.3 million barrels per day as refinery turnarounds gathered pace, data from industry monitor Euroilstock showed on Tuesday.
Supplies of ultra-low-sulphur fuel oil (ULSFO) from the United Arab Emirates are becoming commonplace as Uniper UN01.DE ramps up production at its Fujairah facility, commissioned since the start of the year.
Vitol is shipping a cargo of high-sulphur fuel oil (HSFO) from Fujairah to Rotterdam in what traders say is a relatively unusual arbitrage move.
Shipping data in Reuters shows that Vitol chartered the Navig8 Solidarity Aframax tanker loaded up to 80,000 tonnes of fuel oil in Fujairah on April 10, for discharge in Rotterdam on April 20.
GASOIL
Three barges of 0.1 percent sulphur content gasoil traded at $12-$13 a tonne discounts to May diesel futures. AOT sold to Litasco and BP.
Belgomine sold two barges of 50 ppm gasoil to BP at $5-$5.50 a tonne discount to May diesel futures.
April ICE Low Sulphur Gasoil futures were down 50 cents at $493 a tonne at 1540 GMT. The contract expires on Wednesday.
Benchmark diesel refining margins <LGO-LCO1=R> were at $10.90 a barrel, up from $10.77 on Monday.
The April contract traded at a $1.75 a tonne discount to the May contract, equal to Monday's level.
DIESEL
Three barges of ULSD traded at flat to discounts of 50 cents a tonne to the April low-sulphur diesel futures contract, compared with discounts of $1-$2 a tonne on Monday. Gunvor bought two from Vitol and one from Trafigura.
Vitol sold one cargo to Glencore cif Lavera at a $1 a tonne discount to published pricing.
JET FUEL
Shell sold a barge to BP at a $25 a tonne fob Rotterdam premium to May diesel futures.
No cargoes traded. Bids emerged at a $27.50 a tonne premium to May diesel futures.
FUEL OIL
Barges of 3.5 percent sulphur fuel oil traded at $297-$297.75 a tonne fob ARA, compared with trades at $297.50-$299 a tonne on Monday.
Cadoil bought a cif Algeciras cargo from Trafigura at a $3 a tonne discount to published pricing.
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