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Share Price: 466.35
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Europe Distillates-Diesel gains on French refinery strikes

Mon, 16th Dec 2013 17:46

By Ron Bousso

LONDON, Dec 16 (Reuters) - Diesel barge differentials innorthwest Europe rose on Monday, supported by uncertainty over astring of refinery strikes in France that threatened to tightensupplies.

Demand nevertheless remained meagre as oil majors offeredlarge volumes throughout the day with little buying interest,according to traders.

"There's no real demand on 10 ppm (particles per million) or50 ppm. It's quiet from end-users but some traders areinterested," one trader said.

Diesel barge and cargo differentials rose by around $1.50during morning trade as five of Total's Frenchrefineries remained shut due to strikes.

Unions at several of the refineries agreed later in the dayto end the strike, but the hardline CGT union did not announceits decision before the end of trading.

A similar picture appeared in the Mediterranean. Refineriesoperating at near-minimum rates have been unable to boost profitmargins as demand was thin, trader said.

Gasoil stocks at the Amsterdam-Rotterdam-Antwerp andFlushing storage hub fell by 2.5 percent to above 2.55 tonnes inthe week ended Dec. 6, data from research company Genscapeshowed.

Traders were assessing the impact of BP's rare tenderissued on Friday to buy 300,000 to 420,000 tonnes of diesel permonth in 2014 in northern Europe.

The tender was for delivery on a cost-insurance-freight(cif) basis and closes at the end of next week, according totraders.

Over the past weeks, Russian producers Rosneft and Lukoilsold diesel for next-year delivery at tenders at premiums oftendescribed by traders as unusually strong.

"BP is a large cif spot diesel buyer. This term tender isunusual and it looks like a move to assess how cif term pricescompare with cif spot because spot prices for next year lookaggressive," one trader said.

GASOIL

* No barges of 0.1 percent gasoil traded, with bid/offerscoming at a strong spread of minus $4 to minus $1 a tonne fobARA below the January ICE gasoil futures.

* Three barges of 50 particles per million (ppm) heating oiltraded at $4 a tonne fob ARA above the January gasoil futures.AST sold to Cargill.

* At 1700 GMT the January ICE gasoil futures contract was up $14.00 at $931.75 a tonne.

* The ICE gasoil crack was at $14.60 a barrel,down 35 cents from Friday.

* The January and February ICE gasoil futures contracts were in a small backwardation of 75 cents a tonne.

DIESEL

* Three barges of diesel traded at $15 a tonne fob ARA abovethe January gasoil futures. Gunvor and Shell sold to TPR.

JET FUEL

* BP sold to Shell the two barges that traded at $69 a tonnefob ARA above the January gasoil futures.

* No cargoes traded. BP bid for three cargoes, while Vitoloffered three, including one at $73 a tonne above Februarygasoil futures.

FUEL OIL

* Barges of low-sulphur fuel oil (LSFO) with 1 percentsulphur content traded at $606-$607 a tonne fob ARA.

* Barges of high-sulphur fuel oil (HSFO) with 3.5 percentsulphur content traded at $579-$581.50 a tonne fob ARA, up from$573-$575 a tonne on Friday.

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