22 November 2012 17:40 [Source: ICIS news]
LONDON (ICIS)--Buying activity in the European jet kerosene market has increased this week as a result of better supply, traders said on Thursday.
Seven barge trades have been conducted since Monday according to ICIS data, a reasonably high number for the current conditions, considering only nine barges were traded during the entire month of September.
A broker said the supply side had eased with a few refineries back on-stream.
The greater supply in the market has seen barge differentials decrease this week and were at parity with cargoes on Thursday, both at $77-79/tonne (€60-62/tonne).
The recent tightness in the prompt market has seen barges maintain a higher differential than cargoes for the past six weeks, despite barges being sold on a FOB (free on board) basis, while cargoes are sold on the more expensive CIF (cost, insurance and freight) basis.
Buyers are also being buoyed by indications the ICE gasoil structure is turning contango.
However, the slight contango structure has not been strong enough to encourage storage, with stocks in the Amsterdam-Rotterdam-Antwerp (ARA) region down slightly on Thursday at 331,000 tonnes compared with last week at 389,000 tonnes.
Despite traders talking of Royal Dutch Shell’s Pernis refinery in the Netherlands being back in operation this week, the company purchased 4,500 tonnes of product in the barge market and a 30,000 tonne cargo in Thursday’s European open market trading window.
($1 = €0.78)
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