Europe Distillates/Fuel Oil-Softer, falling stocks may support

LONDON, Nov 10 (Reuters) - Spot differentials on European
physical middle distillates softened slightly in thin trading on
Tuesday, while extended maintenance work at some refineries
continued to support fuel oil prices and cracks.

Market views about middle distillates were mixed. Some
traders said middle distillate differentials and fuel oil cracks
might weaken when refineries complete maintenance.

Others said support would come from destocking towards the
end of the year and deeper refinery run cuts.

Industry data showed a monthly fall in middle distillate
inventories for two consecutive months and a sharp fall in
refinery operation rates.
For refinery maintenance and run cuts, click [REF/E][REF/OUT]

GAS OIL

* Barges of gas oil with 0.1 percent sulphur traded at
parity to November ICE gas oil futures and $3 discounts to the
benchmark, compared with deals at parity and $1 discounts.

* The differentials improved from a $14 discount on Monday,
the lowest since June.

ICE GAS OIL

* Benchmark November ICE gas oil fell 1 percent to $621.75 a
tonne by 1750 GMT. Brent crude was trading 1.5 percent lower at
$76.60 a barrel. LGOc1 LCOc1 NEWOILOIL

* Gas oil's crack to Brent weaker at $7.45/$8.08 a barrel
than $8.29 on Monday. LGO-LCO1=R The prompt contango was
$7/$11 a tonne from $9.50 at the close.

DIESEL

* Differentials on 10ppm diesel barges dipped by about $1
from Monday to trade at premiums of $13 and $14 a tonne fob ARA.

JET FUEL

* Cargoes are discussed between December plus $48 and plus
$50 a tonne cif NWE, compared with a deal at December plus $45
on Monday. Barges traded at December plus $47/$48 a tonne fob.

SWAPS

* East/west gas oil spreads widened to minus $2 for
November, from just minus 50 cents on Monday. But this was still
too narrow to lure spot cargoes from Asia.

* Gas oil barges with 0.1 percent sulphur were steady at
differentials of minus $8.50 a tonne fob ARA to ICE gas oil
futures for November. The November/December backwardation was
around $1.

* Swap premiums for 10ppm diesel were bid at around $13.50 a
tonne cif NWE for November and $10 cif NWE for December.

* Jet fuel swaps were flat at the front of the curve at
premiums of $48.50 cif NWE for the front two months.

FUEL OIL <EURO/DIFF/FO>

* High sulphur fuel oil (HSFO) barges with 3.5 percent
sulphur traded at $453-$456 a tonne fob ARA from $449-$453 on
Monday.

* HSFO's crack to dated Brent widened to minus $5.60 a
barrel from minus $6.20 on Monday.

EUROILSTOCK [O/EUROIL1]

* Euroilstock stock data showed middle distillate
inventories fell by 6.75 million barrel in October from
September, marking a month-on-month fall for the second month in
a row.

* The volume of the fall exceeded the 97,000 barrel fall
from September to October last year, although the stock level of
409.88 million barrels was 10 percent higher than a year
earlier. The volume does not include floating stocks.

* October fuel oil inventories were 0.4 percent lower than
September, but the level was a fall of 4.4 percent from a year
earlier. It has been the industry trend in Europe for recent
years to reduce loss-making fuel oil production and keep
inventories low.

(Reporting by Emma Farge and Ikuko Kurahone; Editing by
Keiron Henderson)