Europe oil/products: Another sudden Brent rally lifts European oil prices

London (Quantum Commodity Intelligence) - A volatile week for Brent crude ended with the front-month future surging again during the European oil product market close on Friday, pushing up prices, although there was a mixed picture for crack values.

Some light ends – Eurobob gasoline in ARA, naphtha and propane cargoes in north Europe - outstripped the gains in Brent.

But most of the oil products trailed behind the end of day rally in crude.

By 1630 UK time, August Brent was trading at $73.56/b, up $0.41/b from the same time Thursday, and up from an intraday low of $72.19/b.

Backwardation in the curve also widened again, with the spread between August and November contracts increasing $0.08 to $2.27/b.

Products

Naphtha cracks bounced back as the paper rallied, with the spot price up $5.75/mt ($0.64) at the close. There were stronger gains in propane cargoes, up $8.25/mt, although this was around the same as naphtha in terms of barrels.

There was a flurry of trade in the gasoline barge market in ARA in the afternoon trading window at levels above the July paper. This contrasted with trades seen in the morning at -$3/mt below July paper, although the differential rose to flat in the early afternoon. Premium unleaded barges traded at $682/mt, below Eurobob E5. Cracks values for July Eurobob paper ended the week at $9.14/b, around the same levels as on Monday, but the August crack improved to $9.63/b, up $0.19 over the week.

Jet barges in FARAG were offered at $20 above July LSG to set a cap for the market. Jet cargoes traded into Le Havre at $2/mt below the cargo curve, with the balance at $18.50/mt above July LSG. Second-half-year cracks for jet cargoes have moved little over the week, dampening enthusiasm for a summer rally in demand as travel restrictions ease.

Diesel barges in ARA saw a flurry of bids and offers and no trades to reflect the lack of demand. Bids and offers were seen at -$2.50/mt below July LSG. In the cargo market, diesel was bid into Amsterdam at $2.50 above July LSG and offered at $3/mt.

Fuel oil continued to trade in narrow ranges. Only 4,000 mt traded on high sulfur barges in ARA, between $392/mt and $393/mt. Another 8,000 mt traded in the 0.5% sulfur market between $502/mt and $504/mt. Second-half-year cracks for HSFO paper have picked up over the week, gaining around $0.35/b.