Europe oil/products: Brent fall, cracks for light ends strengthen
Quantum Commodity Intelligence - Brent fell Monday, although it had recovered from intraday lows by the time of the late afternoon marker as the market continued to seek fresh direction in the wake of the failure of OPEC+ to agree on quotas.
By 1630 London time, September Brent was trading at $75.15/b, down $0.59/b from the same time Friday, to soften European product prices, although cracks generally improved.
Little diesel volume was left for delivery after the expiry of July Low Sulfur Gasoil futures.
Products
Although cargo prices dropped $3.25/mt, naphtha cracks surged higher as nearby swaps fell little compared to Brent. August and September northwest Europe cargo paper was pegged at $667/mt and $665.25/mt, down from $669.75/mt and $659/mt on Friday. Naphtha cargoes were assessed at $682/mt, a steep $15/mt above August paper, which itself was $10.75/mt above September.
Last week, US Gulf Coast sellers booked several sour-light naphtha cargoes to ARA, sources noted, amounting to around 250,000 mt amid thin stocks in the trading hub. Effectively, Europe naphtha cracks followed the action of Japan CIF prices at the Singapore close, with spot and front-month paper both gaining around $0.20/mt.
Meanwhile, the recent volatility in the propane/naphtha spread eased, with balance month pegged at -$53/mt, August at -$43/mt, and September at -$34.25/mt, the same as Friday.
Gasoline prices fell but by less than Brent. Backwardation held in for Eurobob barges in ARA, with E5 trading at $6/mt above August paper and E10 at $7.25/mt above. Premium unleaded barges traded at $730/mt, $2/mt higher than E10 at the time.
MTBE was bid at $812/mt and offered at $826/mt. Some 14,000 mt of E5 barges traded, 3,000 mt of E10 and 14,000 mt in premium unleaded barges.
Spot and August Eurobob barge cracks gained for the third trading day in a row to around $12/b. But winter spec fourth quarter cracks softened slightly.
Jet cargo prices dropped $4.25/mt amid the switch to August LSG pricing, keeping in line with the Brent fall. A cargo was bid into Le Havre at $23/mt above August LSG and another offered into Rotterdam at $24.50/mt. Jet barges were at $23.50 and offered at $24/mt above August LSG.
July Low Sulfur Gasoil (LSGO) futures expired Monday with very little open interest left in the contract, reflecting the lack of demand in ARA for barrels amid an influx into Europe of cargoes from east of Suez and the US. Just 554 lots of open interest were remaining, or 55,400 mt of ultra-low sulfur diesel needing to be delivered in ARA over the second half of the month. Diesel barges traded at $2.75/mt below August LSG.
Fuel oil prices in ARA saw small losses, with marine 0.5% barges down $2.50/mt and HSFO down $1.50/mt.
