Europe jet kerosene premiums rise over Christmas holiday period

31 December 2013 23:59 Source:ICIS News

LONDON (ICIS)--Jet kerosene premiums over gasoil in the European market rose steeply over the Christmas holiday period, with sources offering mixed explanations on Tuesday.

Barge differentials were noted at $69-70/tonne on 18 December, rising as high as $76/tonne (€55/tonne) on 24 December before closing at $75-76/tonne on 31 December.

Cargo differentials rose from $73-74/tonne on 18 December to $77-78/tonne on 31 December.

“Two reasons; one, people closing out shorts before the end of the year – it was mostly in the prompt. East-west gasoil has been relatively strong which would have shut arbitrage into Europe. Maybe we are seeing some sort of effect there. We are not reading too much into it,” explained one trader.

The increasing premiums could reflect fewer cargoes into the region, with one barge seller hearing unconfirmed talk of delayed shipments.

Other factors given were participants closing out short positions before the year’s end, and ongoing buying interest from Shell, who made the only barge purchases between 18-31 December.

($1 = €0.72)

By Richard Welbirg