September 13, 2012 / 4:31 PM / 5 years ago

Europe Distillates-Diesel diffs weaken on seasonal switch

LONDON, Sept 13 (Reuters) - Diesel barge and cargo
differentials weakened in northwest Europe on Thursday as the
seasonal switch to the cheaper intermediate and winter grades
began to take its toll.  
    Gasoil stocks independently held at the
Amsterdam-Rotterdam-Antwerp hub fell over 6 percent to 2.318
million tonnes on Thursday, according to data from Dutch oil
analyst Pieter Kulsen. 
    Traders were said to be clearing out summer specification
diesel in anticipation of the switch to winter grade. 
    Analysts at JBC Energy said that refinery utilisation in the
EU-15 and Norway region was at nearly 85 percent of capacity in
August, up by 1.2 percentage points from the month before,
according to its calculations based on the latest Euroilstock
    This is the highest level this year, JBC Energy said, and
1.8 percentage points above the five-year average. 
    * Four gasoil barges traded at discounts to the October ICE
gasoil futures of $4 a tonne fob ARA, at the weaker end of
Wednesday's range of $1-$4 a tonne discounts.
    * Gunvor sold three barges and North Sea Group sold the
other. Mercuria bought two and Cargill bought two.
    * Two barges of 50 ppm gasoil traded at premiums to October
ICE gasoil futures of $21-$22 a tonne fob ARA, up from
Wednesday's offer at a $20 a tonne premium. North Sea Group sold
both the barges to Vitol.
    * At 1553 GMT, October ICE gasoil futures were down
0.17 percent at $1,003 a tonne.
    * The ICE gasoil crack LGO-LCO1=R was at $18.16 a barrel,
down from $19.10 a barrel around the same time on Wednesday.
    * The October/November backwardation LGO-1=R was at $2.25
a tonne, narrowing from $4.00 a tonne on Wednesday.  
    * Just two diesel barges traded, both of which were
intermediate quality. Vitol sold both barges, one to Glencore
and the other to North Sea Group.
    * The barges traded at premiums to ICE October gasoil
futures of $30-$33 a tonne fob ARA, down from Wednesday's
$35-$36 a tonne premiums.
    * Three diesel cargoes traded in the northwest Europe
market. Total bought a French winter diesel cargo from Shell and
two from Vitol at premiums to October ICE gasoil futures of
$44-$46 a tonne cif NWE. This is down from Total's purchases on
Wednesday at premiums of $48-$52 a tonne.
    * No barges traded as there were no offers. Bids came at
premiums to October ICE gasoil of $87 a tonne fob ARA, down from
$90 a tonne on Wednesday.  
    * No jet fuel cargoes traded either. Bids and offers came at
premiums to October ICE gasoil futures of $88-$91 a tonne cif
NWE, down from $92 a tonne on Wednesday.
    * Barges of low-sulphur fuel oil (LSFO) with 1 percent
sulphur content traded at $720 a tonne fob ARA, up from $718-719
a tonne on Wednesday.
    * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent
sulphur content traded at $658-$659 a tonne fob ARA, up from
$654-$655.25 a tonne in the previous session.
    * The recent widening of the "hilo" spread is being
attributed to increased demand for LSFO following the
introduction of new rules for shipping in North America's
coastal waters. The spread is now at about $64 a tonne, up from
around $30 a tonne in June.
    * Ships entering the North American Emission Control Area
can now only use marine fuel with 1 percent sulphur content,
down from 3.5 percent sulphur content. 
    * Traders said that U.S. buyers had been looking to Europe
to source their LSFO following a fire at Venezuela's Amuay
refinery at the end of August and the failure of the Texas-based
Motiva refinery to get its new crude distillation unit up and
running in time. 

 (Reporting by Claire Milhench; Editing by Alison Birrane)

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