LONDON: Northwest European diesel margins fell below $9 a barrel to their lowest since Aug. 12 on Wednesday as US weekly middle distillate stocks rose unexpectedly, while increased imports into region also kept a lid on margins.
US distillate inventories, which include diesel and heating oil, rose 1.5 million barrels last week, versus expectations for a 157,000-barrel drop, the EIA data showed.
The rise in inventories is likely to encourage US distillate exports to Europe.
Diesel flows from the Asia Pacific, the Middle East and the United States are set to keep the European market well supplied even as upcoming European and Russian maintenance shutdowns curb output.
Reuters shipping data shows several tankers booked in recent days to load middle distillates from Middle East and India in the first half of Sept. to come to Europe.
Tankers carrying around 500,000 tonnes of middle distillates have been provisionally booked to come to Europe from those regions according to Reuters shipping data this week.
Russia's exports of ultra-low sulphur diesel (ULSD) from the Baltic port of Primorsk in September will fall sharply by 12.4 percent to 880,000 tonnes, from the planned 1.038 million tonnes, in August due to seasonal refinery maintenance.
GASOIL
Barges of 0.1 percent sulphur content gasoil traded at $6-$7.50 a tonne discounts to September Low-Sulphur Gasoil futures.
No cargoes traded.
No barges of 50 ppm sulphur gasoil traded. * September Low-Sulphur Gasoil futures traded $15.25 a tonne lower at $412.75 a tonne at 1545 GMT.
Benchmark diesel refining margins stood at $8.94 a barrel, down from $9.77 a barrel on Tuesday.
The September contract traded at a discount of $5.00 a tonne to the October contract, unchanged.
DIESEL
Barges traded at discounts of 75 cents - $1.25 a tonne fob ARA to September diesel, compared with $1.50-$2.00 a tonne discounts on Tuesday.
No cargoes traded.
JET FUEL
Shell sold two barges to Trafigura at $23 a tonne fob ARA above September diesel futures, little changed from premiums on Tuesday.
No cargoes traded.
FUEL OIL
Barges of 3.5 percent sulphur content fuel oil traded at $232 a tonne fob ARA, down from $238.50-$239 a tonne on Tuesday.
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