08 April 2014 17:38 [Source: ICIS news]
LONDON (ICIS)--European vacuum gasoil (VGO) premiums against ICE Brent crude oil futures have fallen month on month because of slowing US demand, industry sources said on Tuesday.
Premiums in the low-sulphur (LS) northwest European VGO markets fell to $7.00/bbl on Tuesday from $12.00/bbl a month earlier, on 7 March.
LS VGO is usually exported to the US, and any fall in US demand could exert downward pressure on VGO differentials.
US demand has fallen this week, contributing to the fall in LS VGO premiums, a VGO trader said.
Meanwhile, the high-sulphur VGO premium against ICE Brent crude oil futures fell from $11.00/bbl on 7 March to $5.00/bbl on Tuesday.
VGO is used to make distillates and is the primary feedstock for European base oils.
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