LONDON Jan 29 Diesel barge differentials in
northwest Europe rose slightly on Wednesday after data from the
United States showed that distillates stocks had fallen by twice
as much as expected after cold weather gripped the country.
The Energy Information Administration said stocks on the
U.S. East Coast had fallen to their lowest level since April
Traders and analysts said that heating oil shortages on the
East Coast due to the prolonged spell of severely cold weather
could trigger more shipments of gasoil and kerosene from Europe,
Several shipments have already made the trip after the
arbitrage to the United States opened. "Vessels were being
diverted to the United States because the HOGO spread was so
wide," a broker said.
The HOGO , which has been at multi-year highs, is
the difference between the front month U.S heating oil futures
contract and ICE gasoil futures.
A trader added that the backwardation in U.S. heating oil
futures was making it difficult to lock in the best prices.
"It's very tight there, but it's difficult to capture as people
are running hand to mouth," he said.
In the Mediterranean market a trader said that demand from
Turkey had slowed this week but it was unclear if this was
linked to currency depreciation and the broader turmoil hitting
emerging markets with large current account deficits.
"Demand is down and production is generally up so the market
seems long on the front," he said.
In refinery news, Valero's 270,000 barrels-per-day
Pembroke plant in Wales will start a two-week maintenance on its
vacuum distillation and visbreaking units in the first half of
* No barges of 0.1 percent gasoil traded. Bids and offers
came at discounts to February ICE gasoil futures of $1-$2 a
tonne fob ARA, slightly weaker than on Tuesday.
* No barges of 50 ppm traded either. An offer came at a $5 a
tonne fob ARA premium to February ICE gasoil futures.
* At 1643 GMT, February ICE gasoil futures were up
$4.50 at $922 a tonne.
* The ICE gasoil crack was at $15.26 a barrel,
up slightly from $15.04 a barrel on Tuesday.
* The February and March ICE gasoil futures contracts were
in a backwardation of $5.50 a tonne, out from $5 a
tonne on Tuesday.
* Nine diesel barges traded at premiums to February ICE
gasoil futures of $8.50-$10 a tonne fob ARA, firming from $8.50
a tonne on Tuesday.
* Shell, AIC, Noble and SK Energy were on the sell side,
while TPR, Morgan Stanley, Hetco and Phillips 66 were buyers.
* No barges traded. A bid came at a premium to February ICE
gasoil futures of $61 a tonne fob ARA.
* No cargoes traded either. A bid came at a premium to
February ICE gasoil futures of $67 a tonne cif NWE.
* Barges of low-sulphur fuel oil (LSFO) with 1 percent
sulphur content were discussed at $590-$607 a tonne fob ARA, in
line with Tuesday's trades at $599 a tonne.
* Barges of high-sulphur fuel oil (HSFO) with 3.5 percent
sulphur content traded at $567-$572.50 a tonne fob ARA, in line
with Tuesday's $568-$571.50 a tonne.