LONDON, July 5 (Reuters) - Diesel barge differentials in
northwest Europe fell to five-month lows of $12 a tonne fob ARA
on Friday as plentiful supplies and weak demand continued to
depress the market.
A U.S.-based broker said there still seemed to be plenty of
interest in sending gasoil and diesel from the United States to
Europe, at least for the rest of July.
Fuel oil barges also remain under pressure having performed
poorly for several months due to a lack of demand from the
'Bunker demand continues to be sluggish as activity in
Europe remains lacklustre and shipping companies rein in costs
as freight rates remain poor,' analysts at JBC Energy said.
'The arbitrage East is closed,' a fuel oil broker said.
'Demand for low sulphur fuel oil (LSFO) is low as economies are
suffering and the market is basically over-supplied.'
JBC Energy noted that LSFO prices in northwest Europe were
under more pressure than those in the Mediterranean. 'Higher
fuel oil demand from power utilities in the Med, seasonally
dependent on summer cooling requirements, partly explains the
regional difference,' it said.
* No barges of 0.1 percent gasoil traded. Bids came at a
discount to July ICE gasoil futures of $1 a tonne fob ARA, and
offers came at a premium of $1 a tonne.
* Four barges of 50 ppm gasoil traded at $11-$12 a tonne fob
ARA premiums to July ICE gasoil futures, down from $14 a tonne
* Vitol sold three of the barges and Noble sold the other.
Morgan Stanley bought three and DS Mineraloel bought the fourth.
* July ICE gasoil futures were up at $11.25 to
$913.50 a tonne at 1544 GMT.
* The ICE gasoil crack was at $14.83 a barrel,
down from $15.35 a barrel on Thursday.
* The backwardation for July/August narrowed
slightly to $4.25 a tonne, from $4.75 a tonne on Thursday.
* Nine diesel barges traded at premiums to July ICE gasoil
futures of $12-$13 a tonne fob ARA from Thursday's $15.50-$17 a
tonne range. This is the lowest differential since early
* Vitol was a heavy seller, accounting for eight of the
barges, with Litasco selling the other. Shell, Trafigura and
Gunvor were on the buy side.
* No jet fuel barges traded as there were no bids. An offer
came at a premium to July ICE gasoil futures of $61 a tonne fob
ARA, up from Tuesday's deal at a $57 a tonne premium.
* No cargoes traded either. A bid came at a premium to July
ICE gasoil futures of $56 a tonne fob ARA.
* Barges of low sulphur fuel oil (LSFO), with 1 percent
sulphur content, traded at $602-$603 a tonne fob ARA, in line
with Wednesday's trade at $603 a tonne.
* High sulphur fuel oil (HSFO) barges, with 3.5 percent
sulphur content, traded at $590.25-$590.75 a tonne fob ARA, up
from $584.50-$585.50 a tonne on Thursday.
(Reporting by Claire Milhench; Editing by David Evans)
Keywords: MARKETS EUROPE/DISTILLATES
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