28 November 2012 10:33 [Source: ICIS news]
LONDON (ICIS)--Demand has increased in the European jet kerosene market, and is easily accommodating fresh supplies from both arbitrage and refinery, a trader said late on Tuesday.
“December is known for holidays and there is more demand in the airports now,” the trader said.
However, another trader described demand as lacklustre – but still outstripping supply – while a buyer said Christmas holiday demand would be no greater than previous years.
Shipping sources noted around 415,000 tonnes of product fixed for the UK and mainland Europe for late November and early to mid-December loading dates, from India and the Middle East.
Sources said as a result of a better-supplied market, the ICE gasoil structure is currently in a slight contango, which is encouraging prompt buying, however, this is not enough to support storage.
“The market is a bit strange – it was heavily backwardated, now in slight contango, but backwardated again next year,” a trader said, adding: “For an [ICE gasoil] contango to support storage there would need to be at least a $6-8/tonne [€5-6/tonne] difference on the prompt and more than that for the future.
“For at least three years the contango has not been strong enough to attract storage.”
Stocks for jet kerosene in the ARA (Amsterdam-Rotterdam-Antwerp) region were at 331,000 tonnes on 22 November, down from 389,000 tonnes the previous week.
($1 = €0.77)
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