LONDON: Gasoline barge prices and gasoil barge differentials firmed in northwest Europe on Wednesday as Europe hit its peak seasonal maintenance period and product inventories in the United States unexpectedly fell.
Maintenance and unexpected outages are keeping Europe's oil products markets tight, with low inventories pushing ICE gasoil futures curve into a strong $6.25 a tonne backwardation at the front end.
Valero's 270,000 barrels-per-day Pembroke refinery in Wales has just entered seasonal maintenance, which is expected to last up to eight weeks.
And in the United States, the Energy Information Administration said that US gasoline inventories fell by 481,000 barrels, compared with a consensus forecast for a 200,000 barrel build.
US distillate stocks also fell by 482,000 barrels compared with expectations for an increase of 800,000 barrels.
Citi analysts said in a report distributed late on Tuesday that middle distillates should continue to perform in the coming month. "The drop in global refining throughput in October should keep things bullish for products at least until the maintenance period is over," they said.
Citi noted that refiners had been running hard over the last few months, but products stocks have struggled to build. "This has partly been because of surprisingly robust demand, surprising given the dour economic outlook," they said.
However, refiners do not expect strong product margins to last, with weak demand expected to offset the low inventory picture over the medium term.
GASOLINE
* One barge of benchmark Eurobob traded in the window at $1,076 a tonne fob ARA, up from Tuesday's trade at $1,064 a tonne. Gunvor sold the barge to Neste.
* Some 7,000 barges of winter grade gasoline traded in the morning, at $1,070-$1,079 a tonne fob ARA. The early trades came at premiums to the October swap of $24-$35 a tonne.
* Total sold the bulk of the barges with Trafigura also on the sell side. Buyers included Shell, Gunvor and Noble.
* At 1548 GMT Eurobob's crack to dated Brent was up at around $19.05 a barrel from around $17.17 a barrel on Tuesday.
* Seven barges of premium unleaded gasoline traded at $1,092-$1,098 a tonne fob ARA, up from $1,090-$1,091 a tonne on Tuesday.
* Gunvor, Statoil and Trafigura were on the sell side whilst Total, Litasco and Phillips 66 were buyers.
* At 1603 GMT ICE Brent crude futures were down $1.17 at $109.28 a barrel.
* October US RBOB gasoline futures were up 2.25 percent at $3.0340 a gallon, in reaction to the bullish inventories data.
* RBOB's crack to US crude futures was at $29.94 a barrel, up from $25.96 a barrel around the same time on Tuesday.
NAPHTHA
* Gunvor sold a naphtha cargo to Vitol for October 10-14 loading dates at $929 a tonne cif NWE. This was down from Tuesday's trades at $937-$939 a tonne cif NWE.
* The prompt naphtha crack improved to around minus $4.59 a barrel, according to Reuters' calculations, from around minus $5.65 a barrel on Tuesday.
* Taiwan's Formosa Petrochemical Corp has cancelled a tender to buy first-half November naphtha after a fire hit a unit operated by its sister company Nan Ya Plastics.
* About 350,000 tonnes of naphtha are expected to go to Asia in October, down from 800,000 tonnes this month.
* Two 0.1 percent gasoil barges traded at discounts to October ICE gasoil futures of $2 a tonne fob ARA, firming from Tuesday's discounts of $3-$4 a tonne.
* Gunvor sold a barge to Morgan Stanley and Shell sold one to Vitol.
* Two barges of 50 ppm gasoil traded at premiums to October ICE gasoil futures of $34-$35 a tonne fob ARA, in line with Tuesday's levels. Shell bought the barges from Litasco and AIC.
* At 1605 GMT, October ICE gasoil futures were down 1.3 percent at $964.50 a tonne.
* The ICE gasoil crack was at $19.35 a barrel, down slightly from $19.52 a barrel on Tuesday.
* The October/November backwardation was at around$6.25 a tonne, unchanged from the previous session.
DIESEL
* Three barges of intermediate quality diesel traded at premiums to October ICE gasoil futures of $36-$37 a tonne fob ARA, a tighter range than Tuesday's $35-$38 a tonne.
* Shell bought the barges from Unipec, North Sea Group and Chevron.
JET FUEL
* Two jet fuel barges traded at a premium to October ICE gasoil futures of $81 a tonne fob ARA. Vitol sold both the barges to Shell.
* No cargoes traded but bids and offers came in the $74-$80 a tonne cif NWE range.
FUEL OIL
* Barges of low-sulphur fuel oil (LSFO) with 1 percent sulphur content traded at $665 a tonne fob ARA, down from Tuesday's price talk at $682.50 a tonne.
* Barges of high-sulphur fuel oil (HSFO) with 3.5 percent sulphur content traded at $615.50-$621 a tonne fob ARA, down from $633-$638.50 a tonne on Tuesday.
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