LONDON: Diesel barge price differentials in northwest Europe fell slightly on Tuesday as demand in the region weakened while supplies were expected to remain ample.
The prompt contango in diesel futures, when the prompt February contract trades above the March futures, has flipped in recent days, limiting demand for storage, traders said. But the diesel market remained in a deep contango of around $42 a tonne going into December 2015, meaning that storing product was still highly attractive for traders.
"There is still good demand, but maybe less given the prompt structure," a trader said.
On the supply side, imports from the US Gulf Coast were expcted to remain at relatively low levels in February with around 400,000 tonnes booked to ship to Europe so far this month, traders said.
The transatlantic arbitrage has been shut for most of the time over the past two months, limiting imports. Larger exports from Russia in February were nevertheless expected to offset any decline from the United States, traders said.
Several cargoes carrying around 300,000 tonnes of gasoil and high-sulphur gasoil are heading to the US East Coast from the Baltic Sea where traders expect high demand following the cold snap there.
Comments
Comments are closed for this article.