LONDON: Diesel barge differentials in northwest Europe dropped sharply on Thursday following the expiry of the August Low Sulphur Gasoil futures contract as large supplies weighed heavily.
Demand in the region remained weak, although fewer cargoes have been put on offer in recent days, helping to support prices.
ARA gasoil stocks fell 1.5 percent in the week to Thursday to 3.223 million tonnes, Dutch consultancy PJK International said.
Demand in the Mediterranean was supported by buying in Turkey where a refinery outage curtailed domestic production, traders said.
A 50,000-barrels-per-day diesel-producing unit at Tupras' 220,000-bpd refinery in Izmit, Turkey has shut for unplanned maintenance, traders said on Thursday. Several associated units were also down as a result of the outage, the sources said.
Several newly built Suezmax tankers have been booked in recent days to load gasoil and diesel from Asia and the Middle East to West Africa and Europe, according to traders.
Deliveries of low-sulphur gasoil LGOc1 for August nearly doubled from the previous month to 3,128 lots, or 312,800 tonnes, according to data from the InterContinental Exchange.
GASOIL
Gunvor sold to BP four barges of 0.1 percent sulphur content gasoil at discounts of $11 a tonne fob ARA to the September Low Sulphur Gasoil futures.
Glencore sold to BP one barge of 50ppm sulphur gasoil at a discount of $10a tonne fob ARA to the September Low Sulphur Gasoil futures, compared with discounts of $2.50 a tonne fob ARA to the August contract on Wednesday.
The August contract expired at $383 a tonne, down from $420.75 a tonne at July's expiry, when deliveries reached 1,634 lots.
September Low Sulphur Gasoil futures were up $16.50 at $402.75 a tonne at 1535 GMT.
The September contract traded in a contango of $6 a tonne to the October contract.
DIESEL
Glencore sold to BP and PetroIneos five barges of 10 ppm diesel at discounts of $7-$7.50 a tonne fob ARA to September diesel futures, compared with discounts of $1-$1.50 a tonne to the August futures on Wednesday.
Vitol sold a cargo to Vitol cif basis Lavera.
JET FUEL
Four barges traded at premiums of $18.50 and $22-$23 a tonne fob ARA to the September futures, compared with Wednesday's trades at a $16 premium. Litasco and Vitol sold to Trafigura.
Vitol sold a cargo to BP at $21.50 a tonne cif Rotterdam.
FUEL OIL
Barges with a sulphur content of 3.5 percent fuel oil traded at $217-$220 a tonne fob ARA, compared with $208-$211 a tonne in the previous session.
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