Europe oil/products: Brent retreats from earlier gains, HSFO falls again

London (Quantum Commodity Intelligence) - The early rally in July Brent to above $70/b failed to hold Tuesday and the crude future retreated in the afternoon to almost the same level as Monday by the European close, although there were higher gains seen on gasoline and diesel, while bunker fuel continued to slide.  

Backwardation narrowed in the nearby future curve, with July Brent up 11 cts/b and August Brent up 21 cts/b by 1630 UK time compared to Monday.  

But Brent was again outstripped by Low Sulfur Gasoil futures, where both the May and June calendarized monthly values were up 37 cts/b and 34 cts/b respectively.  

Products

Naphtha cargo prices in NWE rallied $8/mt (89 cts/b), and the spread above propane cargoes widened to $109.75/mt.

Premium unleaded gasoline barges in AR traded at $661 and $660/mt, and the mean assessment was up $3/mt (36cts/b) from Monday. Eurobob E5 and E10 barges saw steeper rises to reflect trade during the day when crude was much higher. Eurobob E5 started the day trading at flat to June paper, but slipped to a discount of -$2/mt in the afternoon. Trade was brisk with 24,000 mt changing hands.

Jet barges in FARAG were offered at $20/mt above June Low Sulfur Gasoil futures. Jet cargo prices and premiums above Low Sulfur Gasoil futures rose. The market was bid at 25 cts/mt above CIF cargo quotes into Le Havre.

Diesel cracks remained on an upward trajectory as the market continued to climb the curve back to normalcy. Diesel barges traded at -$2.25/mt below June Low Sulfur Gasoil futures.

High sulfur fuel oil barges continued to slip lower, assessed at $361/mt Tuesday, down $1.75/mt from Monday, and its crack value slid to -$12.50 versus July Brent. Crack values for HSFO have been in freefall since mid-April. Marine fuel (0.5% sulfur) fuel oil barges also slipped 50 cts/mt from Monday.