27 September 2013 20:13 [Source: ICIS news]
LONDON (ICIS)--News of imports from the US, Russia and Asia has exerted downward pressure on northwest European diesel cargo markets, pushing premiums down from the previous week, industry sources said on Friday.
Three shipping fixtures published this week reveal that Russia will shift a minimum of 90,000 tonnes of diesel volumes to the UK continental shelf in late September and early October. Meanwhile, an additional 52,000 tonnes of diesel will land in the region from Finland, according to shipping sources.
In the trading window, Vitol sold a couple of 20,000 tonne French winter-grade ultra-low sulphur diesel (ULSD) cargoes to oil major Shell. The cargoes carried a premium of $27/tonne (€20/tonne) over October Intercontinental Exchange (ICE) gasoil futures, and premiums as low as $25/tonne were heard for other trades, down from $28-31/tonne last week. The northwest European cargoes were sold on a CIF (cost, insurance and freight) Havre and Amsterdam basis, for loading between early and mid-October.
October diesel cargo swaps were trading at a premium of $27.50-28.50/tonne on Wednesday morning, a trader said. Meanwhile, outright diesel prices decreased over the week because of a fall in ICE gasoil futures.
Northwest European distillates production remains curtailed on the back of refinery maintenance and run cuts, especially at Shell’s site at Pernis in the Netherlands, INEOS’s at Grangemouth in the UK, ExxonMobil’s at Antwerp and BP’s at Rotterdam.
A diesel trader said the market could turn bullish over the coming days on the tight supply, especially as importers are likely to face logistical issues in distributing incoming wholesale US volumes. Customers are looking for smaller-sized parcels, and there could be a mismatch between what is in demand and what is available, the diesel trader said.
In the barges market, buying appetite was healthy, especially among German consumers, as flat prices were low and the euro strong relative to the dollar in the first half of the week, a barges trader said.
Premiums increased in the early part of the week on the good demand, trading at $25/tonne over October ICE Gasoil futures on Wednesday.
($1 = €0.74)
Follow Cuckoo James on Twitter
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections