Europe Distillates-Weaker on refinery restart, arb

LONDON, July 2 (Reuters) - Differentials on physical diesel
and jet fuel dipped on Thursday on top of a sharp falls in
benchmark gas oil prices.

High inventories amid lack of demand, refinery restarts and
expected imports weighed the market.

ICE GAS OIL

* July ICE gas oil futures fell to as low as $534.25 a
tonne, the lowest price since early June, and they were trading
$19.25 lower at $537.75 by 1739 GMT.

* The contango between July and August was $10.00 a tonne,
25 cents wider than Wednesday's close.

* The prompt crack fell to as low as $5.73 a barrel and ita
was around $6.71.

* Brent crude futures LCOc1 were trading $1.98 lower at
$66.81 a barrel.

DIESEL

* Barges of 10ppm diesel traded at premiums of $9/$11.50 a
tonne fob ARA, compared with Wednesday's deals at $11/$14.

* Swaps were around $12.50 a tonne cif MED.

JET FUEL

* Barges traded at July plus $47 a tonne fob ARA, compared
with deals at July plus $48/$49 on Wednesday.

* Vitol sold a cargo to BP at parity to the average spot
quote.

* Other bid included at August plus $42/$44 a tonne cif NWE.
Offers were made at August plus $51 and the average spot quote
plus $1.52 and minus $5.

* Swaps were benchmark plus $53 a tonne cif NWE for the
balance of July and August was $50.50/$51.00.

GAS OIL

* Gas oil differentials held steady. Barges of gas oil with
0.1 percent sulphur traded at discounts of $1/$4 a tonne fob ARA
to July gas oil futures.

* Swaps were benchmark plus $1 a tonne cif MED for the
balance of July.

* Crack swaps were $6.50/$6.70 a barrel for the third
quarter and $8.60/$8.70 for the fourth quarter.

ARBITRAGE

* Traders said about six long range tankers carrying middle
distillates from the United States were booked last week for the
first half of July, including term contracts, while the
arbitrage was seen as closed.

* They said the materials would be mostly stored on land or
at sea.

* The arbirtage from the United States has been opening this
week, potentially boosting imports for the rest of July. But
that from Asia has been closed, they said.

REFINERY RESTARTS [REF/E]

* Refinery restarts weighed middle distillates,
overshadowing a drop in ARA gas oil stocks. [ARA/]

* Spanish oil and gas firm Repsol (REP.MC) temporarily
restarted its 100,000 barrel-per-day Cartagena refinery on
Thursday after a shutdown since April due to poor margins, a
company spokesman said. [ID:nL2912551]

* That followed Total's Vlissingen refinery, which began to
start units after a planned maintenance since late May.

(Reporting by Ikuko Kao; editing by James Jukwey)