Europe Distillates-Gasoil diffs remain elevated
LONDON, Oct 12 (Reuters) - Gasoil barge differentials in northwest Europe remained at elevated levels on Friday, reflecting continued tightness in the prompt markets. Traders said some gasoil had been shipped from Asia and the Middle East, whilst Mediterranean middle distillates cargoes have moved into the northwest Europe market. However, diesel cargoes from the United States are expected to remain lower than usual this quarter because of a mandatory shift in New York state to heating oil with 15 ppm sulphur. Most of New York city uses heating oil rather than natural gas. This will result in an additional 70,000 barrels per day (bpd) of diesel demand on an annual basis. During sustained cold temperatures this could rise to 170,000 bpd. "This demand shift could be significant because diesel is less available globally than high-sulphur distillate fuel and the major production centre for diesel is on the U.S. Gulf Coast," Dominick Chirichella of the Energy Management Institute said in a note. The tightness is persisting despite demand destruction in Europe, with September diesel sales in Italy down 15.6 percent year-on-year, according to data from Olivier Jakob at Petromatrix. French diesel sales were down 4.7 percent. Traders also noted that German heating oil consumers were staying away from the market as gasoil prices are back above $1,000 a tonne. GASOIL * Eight gasoil barges traded at premiums to November ICE gasoil futures of $11-$14 a tonne fob ARA, in line with Thursday's trades at $12-$14 a tonne premiums. * North Sea Group, Gunvor and Litasco were sellers and Glencore, Morgan Stanley and Vitol were on the buy side. * Two 50 ppm gasoil barges traded at premiums to November ICE gasoil futures of $47-$47.50 a tonne fob ARA, slipping from Thursday's premiums of $49-$50 a tonne. North Sea Group sold the barges to Shell and Total. * At 1544 GMT, November ICE gasoil futures were down 1.33 percent at $1,001.25 a tonne. * The ICE gasoil crack LGO-LCO1=R was trading at $19.93 a barrel, down slightly from $20.33 a barrel around the same time on Thursday. * The backwardation for November/December LGO-1=R was at around $13.25 a tonne, retreating from the wides of $17 a tonne seen just before the October contract expired. DIESEL ULSD10-BD-ARA * Nine barges of intermediate quality diesel traded at premiums to November ICE gasoil futures of $46-$51 a tonne fob ARA, down from Thursday's premiums of $52-$54 a tonne. * Statoil, Koch, Phillips 66 and North Sea Group were on the sell side whilst Shell, Vitol, Morgan Stanley and BP were buyers. JET FUEL JET-BD-ARA * Three jet fuel barges traded at premiums to November ICE gasoil futures of $90-$92 a tonne fob ARA, up from Thursday's premium of $89 a tonne. Shell sold two barges to Morgan Stanley and one to BP. * BP sold a cargo to Shell. Bids and offers came at premiums to November ICE gasoil futures of $72-$83 a tonne cif NWE, edging up from Thursday's $73-$79 a tonne range. FUEL OIL * Barges of low-sulphur fuel oil (LSFO) with 1 percent sulphur content traded at $654-$657 a tonne fob ARA, down from $665 a tonne on Thursday. * Barges of high-sulphur fuel oil (HSFO) with 3.5 percent sulphur content traded at $618-$622 a tonne fob ARA, down from $626-$629 a tonne in the previous session. (Reporting by Claire Milhench; editing by Keiron Henderson)
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