LONDON: European diesel barge differentials held steady on Friday as slowing demand in the region was offset by concerns that Western sanctions on Russia could impact the oil market.
Buying interest in northwest Europe revived this week due to lower outright prices and a stronger euro, which makes dollar-denominated commodities cheaper.
Demand however weakened on Friday, with fewer trades reported in Switzerland and Germany. Higher barge freight costs have further dampened demand, traders said. "Demand isn't great, it's just falling from a bit since yesterday," a barge trader said.
Traders were concerned that US and European Union sanctions on Russian businessmen and politicians could impact oil flows into Europe, which gets around 60 percent of its diesel imports from Russia.
Oil companies are reviewing their dealings with Russian energy trader Gunvor after US targeted its billionaire co-founder. Gunvor traded in the afternoon Platts assessment window.
Royal Dutch Shell traders are allowed to keep dealing with Gunvor, the oil major said in an internal email seen on Friday by Reuters.
GASOIL:
Five 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, weaker than Thursday's discount of $1.50.
Vitol and Gunvor sold to Morgan Stanley and Trafigura.
No cargoes traded in northwest Europe. There were no offers or bids.
No cargoes traded in the Mediterranean. There were no offers.
Two barges of 50 ppm gasoil traded at $15 a tonne fob ARA above the April gasoil futures, up from premiums of $12 a tonne. Litasco and Vitol sold to Shell.
April ICE gasoil futures were up $10.25 to $899.00 a tonne by 1711 GMT.
The ICE gasoil crack was at $13.44 a barrel, down 21 cents from a day earlier.
The April and May ICE gasoil futures contracts were in a contango of around 50 cents a tonne.
DIESEL:
Eight barges of intermediate quality diesel traded at premiums of $17 a tonne fob ARA to April ICE gasoil futures, up from $16.50 a tonne. BP, AST, Licorne and Vitol sold to Shell, Trafigura, Phillips 66 and Licorne.
One cargoes traded in northwest Europe. Gunvor sold to Total at $25.50 a tonne cif Le Havre above April gasoil futures.
One cargo traded in the Mediterranean. Vitol sold to RYP at $37 a tonne cif Koper above April gasoil futures, compared with a premium of $31 a tonne cif La Nouvelle on Thursday.
JET FUEL:
One jet fuel barges traded. BP sold to Shell on a formula basis.
No cargoes traded as there were no offers. There were three bids and no offers.
FUEL OIL:
Barges of low sulphur fuel oil (LSFO) with 1 percent sulphur content traded at $641-$648 a tonne fob ARA.
Barges of high sulphur fuel oil (HSFO) with 3.5 percent sulphur content traded at $572-$574.50 a tonne fob ARA, up from $570.50-$572 a tonne.
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