LONDON: Diesel barge differentials in northwest Europe edged up on Wednesday in a quiet market, suggesting the rush to stock up on diesel had eased for now.
Traders had scrambled for barges on worries that the labour dispute at some US refineries would lead to lower diesel exports to Europe, although most refineries are still running at near normal rates.
ICE low sulphur gasoil futures have also been bid up, opening the arbitrage to Europe from the Middle East. At least three new middle distillates shipments have been fixed to Europe from the Yasref refinery in Saudi Arabia, according to shipping fixtures and trading sources.
The cargoes will load in February and should arrive in Europe in the midst of the turnaround season.
A source close to the company said most of the middle distillates volumes coming out of Yasref would be heading to Europe for now as the East-West spread is currently favourable.
He pointed out that US domestic demand is higher than usual during winter cold snaps because some states use diesel for heating. In addition, Latin America is absorbing a lot of US barrels, so fewer US exports are coming to Europe.
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