Europe oil/products: Brent slumps, but LSG futures fell more
Quantum Commodity Intelligence - Brent slumped in the afternoon Tuesday but its fall was outstripped by European distillate futures.
Crude prices spiked earlier to fresh multi-year highs, but August WTI topping $77/b amid a firmer dollar triggered profit-taking in the wake of OPEC+ failing to reach an agreement.
September Brent was trading at $74.74/b by the 1630 London time close, down $2.10/b from the same time Monday.
But backwardation between September and November Brent only narrowed $0.05 in the slide and the fundamentals remain tight.
Equivalent Low Sulfur Gasoil futures contracts for July fell $2.29/b, more than Brent over the same time frame.
Products
Propane cargo prices only fell $15/mt ($1.18/b), and the spread to naphtha cargoes, which fell $22.75/mt ($2.55/b), narrowed to just $15.50/mt. The global market is nervous about low US stock levels which need to build up to 3 million barrels a week to reach usual levels in October, rather than the 1.2 million barrels seen last week.
Eurobob gasoline barges fell $19/mt ($2.28/b), E10 barges fell $18/mt ($2.16/b) and premium unleaded fell $16/mt ($1.92/b). Backwardation started to ease in the Eurobob E5 barge market, dropping from $7/mt above August paper in the morning to $5/mt in the afternoon. Eurobob E10 traded in the morning at $8/mt above the front-month paper. Premium unleaded barges traded at $721/mt around the 1630 UK time close.
Jet cargo prices fell $17.75/mt ($2.50/b) and they maintained their recent spread versus LSGO. A cargo of jet fuel traded into Rotterdam at $21.50/mt above July LSGO, while a jet barge traded at $20/mt above July.
Distillate barge trade was thin in ARA. Prompt loading diesel barges traded at $1/mt below July LSG and back-end loading barges traded at $0.50/mt below, but only three deals were done. Gasoil 50ppm barges were offered at $3.50/mt below the front month distillate future. Gasoil barges were bid at -$9/mt versus July LSGO. In the north, there was a bid for a diesel cargo into Amsterdam at $3.75/mt above July LSGO. In the Mediterranean, a cargo of diesel was bid into Koper at August LSGO plus $4.50/mt.
High sulfur fuel oil barges fell $16.25/mt ($2.56/b), depressing its crack value versus Brent amid an increase in supply for sour crudes. However, there was slight backwardation in the nearby curve. There was wider backwardation in the marine fuel (0.5% sulfur) curve, with around $2.75/mt between balance July and August swaps. Marine fuel barges fell only $10/mt.
