Distillates resist Brent slide Friday after poor US jobs report
London (Quantum Commodity Intelligence) - Brent slipped lower Friday after the US economy added just 266,000 new jobs in April, according to the US Department of Labor, far below analyst expectations of adding almost a million jobs, but distillate futures were little changed.
The US unemployment rate nudged higher to 6.1%, from 6% in March.
March's Non Farm Payroll report was also revised down to show 770,000 new jobs were created in the US in March, down from the 916,000 estimated a month ago.
But the initial tumble in Brent following the jobs data reversed, which saw the July contract hit an intraday low of $67.41/b, reversed again amid a slump in the dollar in the dollar index.
July Brent was trading at $68.23/b at 16.30 UK time, down 34 cts from the same time Thursday.
The slower pace of the US economy likely feeds through into refinery utilization rates, producing less distillates for export ot Europe, and Low Sulfur Gasoil futures defied the fall in Brent.
Products
Naphtha cargo prices tracked Brent, shedding $3.50/ mt (36 cts/b), and the crack value was steady at -$2.07/b.
Eurobob E5 and E10 gasoline barges in ARA saw sharp losses, reflecting trades at times when Brent was near its intra-day low. Prices fell $13 ($1.56/b) and $13.50/mt ($1.62/b), far more than Brent, which will likely mean they will correct again Monday. Premium unleaded gasoline barges were assessed $3.50/mt (42 cts/b) lower.
Jet barges traded in FARAG at $22/mt above May Low Sulfur Gasoil futures for the second day in a row. A jet cargo traded into Rotterdam at $3/mt below June paper.
The calendar month for May Low Sulfur Gasoil futures, combing May and June contracts, was the same as Thursday, while the June monthly value was 17 cts/b higher. But most diesel and gasoil prices in Europe saw small $/mt losses in a nod to the slide in Brent. Spot cracks rose across the board.
The spreads between high sulfur fuel oil barges and marine fuel (0.5% sulfur) barges in ARA widened to $107.50/mt, with HSFO shedding $4/mt, more than Brent, and marine fuel (0.5% sulfur) down only 50 cts/mt to reflect the strength of distillates. The hi5 spread in the forward curve also widened.
