08 January 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--The European jet kerosene market remains well supplied this week, with little change in market fundamentals since the Christmas holiday break, sources said on Tuesday.
The well supplied market is a huge turnaround from the undersupplied market seen in November, when refinery maintenance created dependence on arbitrage vessels.
A trader said the mild oversupply is a result of attractive refining margins of jet kerosene over diesel.
“Refiners are currently maximising jet kerosene production over diesel as diesel prices had slipped recently, giving jet the advantage,” the trader said.
Sources also said the mild European winter is limiting demand for dual-purpose kerosene (DPK) for heating purposes, which can impact prices if demand jumps suddenly.
In Japan and the Far East, temperatures are extremely low and there is demand for DPK, but a distinct arbitrage between the west and the east is yet to be seen with most of the requirements being met by South Korea.
Shipping sources noted one 60,000 tonne cargo fixed for the end of January from Kuwait to the UK/continent.
A seller said December demand was weak, with January faring only slightly better in a traditional quiet period.
($1 = €0.76)
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