Europe Distillates/Fuel Oil-hold firm on refinery cuts

LONDON, Nov 11 (Reuters) - Spot differentials on European
physical middle distillates were firm in thin trading on
Wednesday, with extended maintenance work at some refineries
also supporting fuel oil prices and cracks.

But high levels of floating storage -- which some traders
say may now have peaked at more than 90 million barrels heading
into the winter months -- kept a lid on prices, with ample
supplies and demand still relatively weak. [ID:nLB165344]

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 $1 discounts to the
benchmark, compared with deals at parity and $3 discounts on
Tuesday.

* 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 $621.25 a
tonne by 1723 GMT. Brent crude was trading 12 cents lower at
$77.38 a barrel. LGOc1 LCOc1 NEWOILOIL

* Gas oil's crack to Brent was slightly firmer at $7.47 a
barrel from $7.45 on Tuesday. LGO-LCO1=R The prompt contango
was $10.50 a tonne from $10 at the close.

DIESEL

* Differentials on 10ppm diesel barges rose by about $2 from
Tuesday to trade at premiums around $16 a tonne fob ARA.

JET FUEL

* Cargoes traded between December plus $46 and plus $53 a
tonne cif NWE, compared with discussions around December plus
$46 on Tuesday. Barges traded at December plus $47/$48 a tonne
fob.

SWAPS

* Jet swaps moved into a $1 contango from flat on Tuesday,
reflecting the supply glut in middle distillates.

* November swaps traded at $48 a tonne cif NWE and December
rose to $49.

* Swap barge differentials for 0.1 percent gas oil barges
dipped lower on the curve to minus $9 a tonne fob ARA for
November following news of a hike in floating storage volumes to
over 90 million barrels. [ID:nLB165344]

* Traders said stocks at these levels would be more than
ample to meet demand in the case of a cold snap. "If demand
picks up, the product is available," said a trader.

* East/west spreads narrowed to minus $1.50 from minus $2,
leaving the arbitrage from Singapore shut. But traders said weak
demand in the United States meant that spot cargoes were being
booked from there.

* "This has caused there to be no decline in supply of
middle distillates in Europe despite the European refinery
maintenance programme," an analyst said.

FUEL OIL <EURO/DIFF/FO>

* High sulphur fuel oil (HSFO) barges with 3.5 percent
sulphur traded at $450-$453 a tonne fob ARA from $453-$456 on
Tuesday.

* HSFO's crack to dated Brent widened to minus $5.50 a
barrel from minus $5.60 on Tuesday.

EUROILSTOCK [O/EUROIL1]

* Euroilstock 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 Eurhope for recent
years to reduce loss-making fuel oil production and keep
inventories low.

(Reporting by David Sheppard, Emma Farge and Ikuko Kurahone;
Editing by Anthony Barker)