Europe diesel premiums drop on declining demand, healthy imports

08 November 2013 20:59  [Source: ICIS news]

LONDON (ICIS)--The wholesale diesel market in Europe is currently limited to a few major outlets in Germany, the UK and the Mediterranean as the start of the cold weather continues to depress demand, industry sources said on Friday.
Outright diesel cargo prices fell from Monday to Friday because of a drop in ICE gasoil futures, which, in turn, were driven by a fall in ICE Brent crude oil futures.
In the barges market, premiums over ICE gasoil futures dropped to as low as $9/tonne (€7/tonne) FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp) early in the week from $11/tonne FOB ARA at the same time last week. 

Diesel premiums have fallen sharply in the past few weeks, pressured by the end of summer seasonal demand and imports from the US and Russia.
In other news, Europe is set to import 364,000 tonnes of diesel volumes from the US Gulf Coast (USGC), shipping sources said.

Nine shipping fixtures published this week reveal the diesel volumes will be transported from the USGC to the UK continental shelf and the Mediterranean region on vessels due to load in mid-November.
The clean petroleum product from USGC can also be converted into the 50ppm gasoil grade that is commonly used in Germany, industry sources maintain.
The US is a major source of the transport fuel for European markets. Meanwhile, a diesel trader said the northwest European market was also being supplied from the Russian port of Primrosk.
Two shipping fixtures published this week revealed 44,000 tonnes of diesel was moving from the Baltic region to the UK continental shelf in mid-November.

($1 = €0.74)

By: Cuckoo James
+44 (0) 208 652 3214

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