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European jet fuel buyers attracted by lower prices

ICIS News : 5-Mar-13 23:59


LONDON (ICIS)--Lower outright prices in the European jet kerosene market has attracted buyers, with nine deals occurring in the past five trading days, sources said on Tuesday.

Prices in the barge market have softened because of weaker ICE gasoil values and a well-supplied market which is keeping differentials mostly stable.

Sources said Norwegian oil producer Statoil is currently long of product, shown by its presence in the open-market trading window where it sold eight of the nine barges traded this week.

Barge differentials remained mostly stable through the week and were at $82-84/tonne (63-65/tonne) on Tuesday. Conversely the cargo market is understood to be tight, with no cargo trades and just one offer seen since 22 February.

Cargo differentials firmed for most of the week, before easing to $94-96/tonne, as a result of a cargo being on offer on Tuesday.

A trader said the arbitrage to Europe from the Middle East and India is not attractive at present, with stronger premiums in Asia and the US.

The trader also said refineries are also shifting to maximise diesel production instead of jet kerosene output because of a more favourable crack spread on diesel.

The shorter supply levels could be further impacted by the upcoming Easter flying period, however a buyer said the situation is balanced by a well-supplied barge market and expectations the arbitrage to Europe will re-open later in the month.

($1 = 0.77)



By Kate Wilcock
+44 208 652 3214
icisnews.europe@icis.com

 
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