LONDON: Diesel barge differentials in northwest Europe rose on Tuesday as buyers sought to benefit from weak outright prices and a strong euro to replenish stocks.
The front-month gasoil futures continued to trade at a discount to the May contango which leads traders to store product rather than sell, further boosting prices.
"Germans have been buying quite a lot. The flat price and the euro-dollar are pretty good," a trader said.
A stronger euro makes dollar-priced commodities cheaper. The region was nevertheless seen as well supplied as imports from Russia were expected to reach 1.9 million tonnes in March while diesel imports from the US Gulf Coast were expected to remain strong in the coming months.
"Europe will be pressured again in the coming months by easing maintenance in both regions and rising import volumes, especially in/from the US," analysts at Vienna-based JBC Energy said in a note.
GASOIL:
Three barges of 0.1 percent gasoil traded in the Platts price assessment window at discounts to April ICE gasoil futures of $2 a tonne fob ARA, compared with discounts of $3 a tonne on Monday. SK Energy sold the barges to BP and Gunvor.
No cargoes traded in northwest Europe. There were no offers or bids.
No cargoes traded in the Mediterranean. Vitol offered two cargoes cif basis Lavera, BP bid for one cargo into Naples.
Two barges of 50 ppm gasoil traded at premiums to April ICE gasoil futures of $11 a tonne fob ARA, up from $10 a tonne. Vitol and AST.
April ICE gasoil futures were up $3 to $892.50 a tonne by 1703 GMT.
The ICE gasoil crack was at $13.13 a barrel, up from $12.79 a barrel a day earlier.
The April and May ICE gasoil futures contracts were in a contango of around 75 cents a tonne, narrower than Monday's contango of $1.25 a tonne.
DIESEL:
Six barges of intermediate quality diesel traded at premiums of $12-$13 a tonne fob ARA to April ICE gasoil futures, up from $10-$10.50 a tonne.
Noble, Vitol, Socar and SK Energy sold to Hetco, Shell, Phillips 66 and Trafigura.
No cargoes traded in northwest Europe. Vitol offered two cargoes cif basis Le Havre. There were five bids.
No cargoes traded in the Mediterranean. There were no offers and seven bids.
JET FUEL:
Two jet fuel barges traded, including one at $51 a tonne fob ARA above the April gasoil future, unchanged. Lufthansa sold to BP, BP sold one barge to Shell. No cargoes traded.
FUEL OIL:
Barges of low sulphur fuel oil (LSFO) with 1 percent sulphur content traded at $638-$639 a tonne fob ARA, up from $633 a tonne on Monday.
Barges of high sulphur fuel oil (HSFO) with 3.5 percent sulphur content traded at $573-$574 a tonne fob ARA, up from $570.50-$571 a tonne.
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