LONDON (Reuters) - Benchmark European diesel refining margins rose to their highest since November 23 on Thursday, as tighter supplies and strong demand gave the market a boost.
The margin, which measures the profitability for refiners of refining crude into diesel, was trading at $12.55 a barrel at 1529 GMT, and hit a session high of $12.64 a barrel.
A confluence of tighter supplies due to refinery outages and limited imports from other regions and strong demand gave the market a floor.
In the Mediterranean region, an incident at Greece’s 100,000 barrels a day Elefsina refinery led operator Hellenic Petroleum to declare force majeure on diesel exports last week.
Hellenic has already purchased three diesel cargoes since the incident occurred on July 8.
A longer than expected shutdown at Total’s Leuna refinery in Germany has led to higher than usual demand for diesel into the country.
At the same time, an unexpected fall in U.S. distillate inventories last week will give European margins even more support.
Europe’s diesel imports from the United States had already fallen in July to less than 1.5 million tonnes, from close to 2 million tonnes in June, as Latin American refinery outages lured U.S. cargoes.
U.S. distillate inventories were down 2.1 barrels last week, much higher than expectations in a Reuters poll for a 1.2 million barrel increase, data from the Energy Information Administration showed on Wednesday.
Diesel imports from the East into Europe were also curtailed as cargoes were diverted to meet strong demand in India.
Nearly 20 percent of Europe’s diesel imports arrive from East of Suez refineries, according to consultancy Energy Aspects.
Reporting by Ahmad Ghaddar. Editing by Jane Merriman