Europe VGO differentials over ICE Brent crude rise on US demand

12 November 2013 16:47  [Source: ICIS news]

LONDON (ICIS)--European vacuum gasoil (VGO) differentials against ICE Brent crude oil futures have risen on the back of improved US demand, industry sources said on Tuesday.

Premiums in the low-sulphur (LS) northwest European VGO markets rose to $2.00/bbl on Tuesday, having been at parity with ICE Brent crude oil futures last Friday.

A VGO trader said the market was picking up due to demand from the key US export market. LS VGO is usually exported to the US, and any increase in demand exerts upward pressure on VGO differentials.

Meanwhile, high-sulphur VGO differentials rose from minus $2.00/bbl on Friday to be at parity with ICE Brent crude oil futures on Tuesday.

VGO is used to make distillates, and is the primary feedstock for European base oils.

($1 = €0.75)

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

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