Euro oil/products: Cracks soften as French strikes ease, crude pulls back

Quantum Commodity Intelligence - Crude oil futures fell heading into the European close on Thursday having initially hit their highest level since Friday during the day, while in the products market gasoline and diesel cracks softened as French strikes eased despite one union saying it would hold out for at least another week.

ICE low sulfur gasoil futures for November were down 2.2% at a two-week low of $1,051/mt by the 1630 close, while December was down 1.7% at $985.25/mt.

That move came as crude oil futures ended the session largely unchanged, having built on Wednesday's gains before the familiar and conflicting push and pull of market fundamentals and macro pressures cancelled each other out in a volatile session.

Front-month December ICE Brent futures were trading at $92.76/b (1650 GMT), compared to an intraday high of $94.77/b and Wednesday's settle of $92.41/b.

At the same time, Dec22 NYMEX WTI was trading $83.96/b, versus Wednesday's settle of $85.52/b, while Nov22 was trading at $86.44/b heading into expiry.

In Europe, some staff at TotalEnergies' 240,000 bpd Gonfreville refinery said they would continue with their strike until at least quarterly results are published next week, along with some staff at the 119,000 bpd Feyzin plant.

The rest of France's month of strikes appear near resolution, however, with staff at the 210,000 bpd Donges refinery saying Wednesday they would go back to work. ExxonMobil reached an agreement with staff last week.

Despite that, three weeks of industrial action have taken their toll and bottlenecks remain in the system, with Insights Global data published Thursday showing ARA gasoline inventories at a three-month low and gasoil at its lowest in six weeks.

Products

Naphtha cracks moved further into negative territory amid ample regional supply. Shell bid up to $3/mt over the November swap for a naphtha cargo towards the end of the laycan, and was offered down to $15/mt over balmo by Shell. Neither indication tested value and naphtha cargoes were assessed at an $8.75/mt premium to November swaps at $660.50/mt.

Gasoline cracks slipped as physical premiums over swaps fell further from last week's record highs, as fuel shortages eased in northwest Europe. Totsa sold a single E5 oxy barge to BP at a $91/mt premium to swaps, down $18/mt on the day, and was assessed at $905/mt. While Varo bought 7kt of non-oxy E10 barges from BP and Shell at a $120/mt premium to swaps, down from $135/mt the previous day, and were marked at a volume-weighted average of $933/mt.

Jet barges firmed relative to cargoes, but both lost ground to crude. BP lifted a jet cargo from Glencore at $15/mt above swaps into Rotterdam towards the end of the loading window, which was deemed too low for representative value, and was assessed at around $32/mt above underlying swaps at $1,061/mt, down $1.50/mt on the day. Barges were also offered down, to around flat versus ICE gasoil by Unipec at the front-end, and were assessed up $2.25/mt against futures to $1,035/mt.

Diesel cracks softened as bids came in below value on the paper, with Trafigura closest at $150/mt above ICE November gasoil for ULSD cargoes into Immingham. Taking into account location and loading dates, cargoes were assessed up $3.75/mt against LSGO to $1,209.75/mt. ULSD barges were offered down to $149/mt above futures at the front-end and $155/mt in the mid-window, which pushed value down $2/mt against LSGO to $1,226/mt. Trades were seen on 50ppm barges for the second straight day, as OELP lifted from Vitol at $75/mt above November gasoil at the back end, and were marked at an $85/mt premium at the MW, representing a $4.50/mt fall on the day.

The marine fuel 0.5% barge market in ARA saw trade with four deals booked by BP and Glencore from Mercuria and Shell. The front end of the market traded at $617-$618/mt, while the mid-window was done at $616-$617/mt. That left the assessment up $16.50/mt at $616.50/mt. In the fuel oil 3.5% barge market, six trades were registered as Gunvor and Vitol sold to BP and Trafigura. Front end barges changed hands on bids and offers at $366-$371/mt, while a sole mid-window barge was booked at $366/mt. That left Quantum's assessment down $1/mt at $366/mt. In the Med, Glencore was still looking for a buyer for a 27,000-mt cargo for shipment 10-14 Nov at a $9.25/mt CIF Algeciras premium to swaps and pricing 7-11 Nov.