Europe oil/products: Cracks rally as crude flatlines

London (Quantum Commodity Intelligence) - Brent was little changed by the late afternoon marker Thursday, after recovering from a slide when European markets opened and then coming under pressure again later. 

Concerns of rising inflation coupled with the likely re-emergence of Iranian barrels onto the world market is maintaining bearish sentiment, which saw Brent slump more than $3/b the previous day.

Oil products cracks rallied in Europe, with light ends and fuel oil outstripping middle distillates. 

Products

Spot and nearby naphtha cracks in north Europe gained slightly, but were little changed from August onwards.

Premium unleaded gasoline barges in AR traded at $640/mt five times to cement the price. Eurobob E5 barges traded 16,000 mt at an average of $365.50/mt, with most of the lots trading $1/mt under the June swap during the day. Gasoline stocks in the trading hub fell to 1.123 million mt over the week to May 20, down from 1.196 million mt, according to brokers, citing Insights Global.

Prompt loading jet barges in FARAG traded at $1 and $0.50/mt below CIF cargo quotes and were also offered at $19/mt above June Low Sulfur Gasoil futures. Cargoes were offered at $21/mt above June distillate futures. Jet fuel stocks rose to 967,000 mt over the week to May 20, up from 934,000 mt a week earlier.

Diesel barge prices in ARA edged higher and cracks gained again. With the exception of May 13, cracks have gained every day this month. The market traded at $2/mt below June Low Sulfur Gasoil futures.

High sulfur fuel oil and marine fuel (0.5% sulfur) cracks recovered in ARA for the second day in a row. Stocks in ARA fell again this week, dropping to 1.214 million mt, extending last week's drop to 1.265 million mt.