LONDON: Diesel refining margins in northwest Europe weakened on Wednesday after a large and unexpected rise in US stocks which was however offset by outages in major Gulf Coast refineries.
US distillate stockpiles, which include diesel and heating oil, rose last week by 1.9 million barrels, versus expectations for a 742,000 barrels drop, the EIA data showed.
The arbitrage from the US Gulf Coast remained closed, limiting exports on the transatlantic route.
ExxonMobil Corp shut a 110,000 bpd crude distillation unit at its 502,500 bpd Baton Rouge refinery on Tuesday as flooding disrupted operations at a liquefied petroleum gas (LPG) storage facility, sources familiar with plant operations said.
That follows Motiva's Convent, Louisiana refinery outage last week.
Lower exports of diesel from Russia in August have helped support the market, although volumes were expected to rise steadily in the coming months as refiners increase output and export infrastructure in the Baltics is increased, traders said.
China's diesel output was down by 2 percent in July from a year earlier at 14.74 million tonnes, official data showed.
Swiss-based trading house Gunvor says it has secured a $200 mln project financing for the development and infrastructural upgrade of its facilities at its 88,000 barrels-per-day Rotterdam refinery.
GASOIL
No barges of 0.1 percent sulphur content gasoil traded.
No cargoes traded.
Barges of 50ppm sulphur gasoil traded at a discount of $7 a tonne to the September Low Sulphur Gasoil futures, compared with discounts of $6-$6.50 a tonne on Tuesday.
September Low-Sulphur Gasoil futures traded 50 cents lower at $428.25 a tonne at 1540 GMT.
Benchmark diesel refining margins stood at $9.18 a barrel, down from $9.36 a tonne.
The September contract traded in a contango of $6.50 a tonne to the October contract, widening from $5.75 a tonne on Tuesday.
DIESEL
Barges traded at discounts of $6.50-$7 a tonne fob ARA to the September diesel contract, compared with $5.50-$6 a tonne discounts on Tuesday.
BP bought two cargoes from Vitol and Glencore cif basis Le Havre and Hamburg, respectively. JET FUEL
KLM sold one barge to Trafigura at $24 a tonne fob FARAG above the September diesel futures. Shell sold two barges to Trafigura at premiums of $26 a tonne.
No cargoes traded.
FUEL OIL
Barges of 3.5 percent sulphur content fuel oil traded at $237.50-$240 a tonne fob ARA.
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