LONDON (ICIS)--European vacuum gasoil (VGO) differentials against ICE Brent crude oil futures have hit a six-week low on the back of declining US demand, industry sources said on Friday.
Premiums in the low-sulphur (LS) northwest European VGO markets fell to $9.00/bbl on Friday, down from $12.00/bbl on Friday 7 March.
LS VGO is usually exported to the US, and any decline in demand exerts downward pressure on VGO differentials.
Meanwhile, high-sulphur VGO differentials fell from a premium of $11.00/bbl on Friday 7 March to $7.00/bbl on Friday.
VGO is used to make distillates and is the primary feedstock for European base oils.