Europe Product Swaps-Gasoil firms in cold weather

LONDON, Feb 13 (Reuters) - Gasoil barge differential
swaps firmed over the week to Monday as northwest Europe
continued to suffer in the grip of an extreme cold spell,
although traders said there was still little sign of heating oil
demand picking up.
With inland waterways across northwest Europe frozen, barges
are unable to serve all of the market, but ICE gasoil
backwardation is strong as prices have risen at the front end of
the curve.
German households have been running down their heating oil
tanks rather than restock given the relatively mild winter up
until the end of January. The sudden and severe drop in
temperatures is now expected to lead to some buying once the
canals and rivers melt.

MIDDLE DISTILLATES
* March ICE gasoil futures were flat at $997.25 a
tonne by 1423 GMT.
* The ICE gasoil curve is in a backwardation of $5 a tonne
for March/April LGO-1=R as the price has risen sharply at the
front end as the severe cold weather has continued.
* April/May is in a backwardation of $4.75 a tonne. German
households are expected to restock their tanks in the spring,
having held off all winter.
* The gasoil barge differential swap for March was stronger
at $1.50 a tonne, pushing up from $0.75 a tonne last Monday as
the extremely cold weather continued in northwest Europe.
April's differential was also stronger at $1.63 a tonne, up from
last Monday's $1.38 a tonne.
* However, brokers and traders said there was still little
sign of heating oil demand coming through with frozen inland
waterways preventing barges from serving the market.
* March diesel barge differential swaps were at $20.94 a
tonne, weaker than last Monday's $23.69 a tonne.
* "The prices are slowly falling due to continued lack of
demand in Europe, and a few more cargoes are heading this way
from the U.S.," one diesel swaps broker said.
* "Diesel swaps are dead - there is very little liquidity
and not much chance to make money," he added. "With no-one
swinging a big axe, the prices are just dwindling down."
* A diesel barge trader added that people were also driving
less because of the icy roads in northwest Europe.

GASOLINE
* Gasoline barge swaps were quoted firmer at $1,040 a tonne
fob ARA for March, up from last Monday's quote of around $1,000
a tonne.
* Physical gasoline prices continued to firm in the week to
Monday, finding some strength in a drawdown of European
inventories during January. These fell by 1.19 percent during
the month and by 9.86 percent on a year-on-year basis.
* Gasoline barge swap prices rose to $1,065 a tonne by
April, but the curve turned into backwardation on a monthly
basis into January 2014.
* The gasoline refining margin swap or crack spread rose to
around $6.30 a barrel by midday on Monday, firmer from last
Monday's quote of around $5.90 per barrel.

NAPHTHA
* Ongoing demand from the petrochemical industry together
with thinner supply lent support to naphtha, while traders
expect that further upside could come as refiners start the
turnaround period in spring.
* The discount between propane and naphtha shrank to around
$18 a tonne from last Monday's $40 a tonne as propane continued
to firm due to the cold spell gripping Europe.
* March naphtha cargo swaps were quoted at just under $1,020
a tonne by early Monday afternoon, a strong rally from last
Monday's price of $963 a tonne.
* The curve is in backwardation until December 2013 on a
monthly basis, according to brokers.
* Naphtha crack spreads for March were at around minus $4.85
a barrel, firming slightly from last Monday's quote of around
minus $5.15 a barrel.

JET FUEL
* March jet fuel cargo differential swaps were trading at
around $64.84 a tonne cif NWE, with April differential swaps at
$72.10 a tonne.
* The curve is in contango until August this year.

FUEL OIL
* The February "hilo" - the spread between low and high
sulphur fuel oil barge swaps - was firmer at around $26.27 a
tonne, up from around $21.91 a tonne last Monday.
* The March hilo was at about $29.83 a tonne.
* Low sulphur fuel oil, which is more expensive than high
sulphur fuel oil, has been in demand over the past week for
power generation in Europe. Utilities in the UK, France and
Italy have been burning LSFO to meet the extra demand for
heating during the prolonged cold snap.
* Prompt LSFO barge swaps were trading at around $717.15 a
tonne fob ARA, with March swaps at $711.98 a tonne.
* Prompt HSFO barge swaps were at around $690.62 a tonne fob
ARA, with March swaps at $682.21 a tonne.

(Reporting by Claire Milhench and Zaida Espana; editing by
Jason Neely)