Brent rally lifts Europe complex, but HSFO and jet barges trail behind
London (Quantum Commodity Intelligence) - The European oil complex surged Tuesday with some oil products outstripping gains in rallying Brent to compensate for lacklustre gains at the end of last week, although high sulfur fuel oil barges, jet barges, and propane cargoes in the north failed to keep pace.
July Brent was trading at $68.72/b by 16.30 UK time, up $2.23/b from the same time Friday.
The new front-month crude future was trading 45 cts/b above August Brent amid tightness in North Sea crude with maintenance work disrupting the flow of Forties over the summer.
Products
Naphtha cargo prices rallied $23.50/mt ($2.61/b) to improve crack values versus Brent. The east/west May paper for the spread below Japan naphtha also narrowed to $9.25/mt from $10/mt. Naphtha cargoes in north Europe trailed the drop in crude on Friday and outstripped crude Tuesday to leave the crack at -$1.80/b.
Gasoline prices and cracks extended gains at the end of last week, with premium unleaded barges trading at $667/mt, up $21/mt ($2.52/b) from Friday. Eurobob E5 barges also rallied amid healthy trade, with 22,000 mt changing hands over the day.
Jet barges traded at just $17/mt above May Low Sulfur Gasoil futures, up $14.25/mt ($1.80/b) from Friday. But jet cargoes followed Brent higher, which was also reflected in the nearby paper market. The $17.50/mt ($2.22/b) gain in jet cargo prices in north Europe was capped by an offer at $23.50/mt above June Low Sulfur Gasoil futures. The premium for cargoes over barges widened to $6.25/mt, which is historically wide.
European distillates surged higher than Brent. May Low Sulfur Gaosil futures were up $18.75/mt ($2.51/mt), June was up $17.75/mt ($2.38/mt, and the contango spread between the two narrowed to $1/mt. Diesel barges traded at just 50 cts/mt below May Low Sulfur Gasoil futures. Primorsk diesel exports will be down 11.8% in May from April, according to reports.
High sulfur fuel oil barges traded at $376/mt, up just $9.25/mt ($1.45/b), and its crack value versus Brent dropped to -$9.50/b. But marine fuel (0.5% sulfur), with its heavy influence of distillate blends, traded at $479/mt, up $17.25/mt. The spread between the two grades widened to $103/mt.
