LONDON: Diesel barge differentials in northwest Europe rose on Friday on strong prompt demand due mainly to continued buying for storage.
End-user demand remained stable, as colder weather in northern Europe increased buying of heating oil, traders said.
Diesel prices and refining margins have recently been supported by strong storage demand as prompt prices dropped below futures in a market structure known as contango.
The strong demand meant the front-end contango was erased and flipped into the opposite scenario, backwardation, as prompt supplies dwindled due to the increased buying for storage.
"The north is seeing support from storage plays," a trader said.
ARA gasoil stocks held in independent storage rose by 7 percent in the week to Thursday to 2.921 million tonnes, their highest since May 2011, data from Dutch-based PJK International showed.
The arbitrage from the US Gulf Coast was seen open going into March and April, traders said.
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