Europe oil/products: Distillates and gasoline outpace rally in Brent in bullish day

London (Quantum Commodity Intelligence) - Brent rallied again Tuesday but the crude future was outstripped by gains in European distillate futures and gasoline to cement a bullish start to the week. 

Despite talk of OPEC+ mulling over a further relaxation of its production cuts, August Brent topped $75/b during the day, although it retreated slightly to $74.75/b by 1630 UK time, still up $0.40/b from the same time Monday.

But September, October and November Brent all gained $0.48/b over the same timeframe. 

Funds have been supporting the rally with speculative net-length rising in both Brent and WTI futures and options. 

Meanwhile, distillate futures outstripped crude futures, with front and second month Low Sulfur Gasoil futures up $0.70/b and $0.63/b respectively.  

Products

Naphtha cargoes in north Europe were assessed $5.75/mt ($0.64/b) higher amid a rally in paper. The July spread to Japan narrowed again, pegged at $11.50/mt down $0.25/mt from Monday, but August widened to $13.25/mt, up $0.50/mt from Monday.

Eurobob E5 gasoline barges started the day trading at flat to July paper, but climbed to a $2 premium in the afternoon. Eurobob E10 traded at a $3 premium to July paper throughout the day. But the strength of gasoline was reflected in premium unleaded barges trading several times at $698/mt and once at $699/mt near the 1630 UK close. The $698/mt assessment was up $6.50/mt ($0.78/b) from Monday. Cracks for July Eurobob barge paper were up $0.38/b Tuesday, and have now gained $0.70/b since last Wednesday.

There was a cross over in the jet cargo market in north Europe with cargoes bid into Le Havre at $20.50/mt above July LSG and offered at $20/mt above July into Rotterdam. Jet prices were assessed $6.75/mt ($0.85/b) higher, and there was also a positive reaction in the nearby forward curve, lifting cracks slightly. But jet is not responding to the rally in crude recently, and the July crack has been softening since June 9. Singapore jet is very soft.

Distillate futures outstripped gains in Brent. but there is very little trade in the market, and diesel barges drew a blank again today. The lowest offer for a prompt loading barge was -$2/mt versus July LSGO. Diesel cargo in the north saw bids between $2.75 and $3/mt above July LSGO into Amsterdam, and offers at $3.25 and $3.50 into the port.

Trade was thin in the fuel oil barge market, with 6,000 mt of high sulfur changing hands at $397/mt, and 8,000 mt for 0.5% sulfur between $509.50/mt and $510.50/mt. The Singapore FOGO ended the day trading at -$67/mt, with the Europe FOGO printing -$91.25/mt on both front months respectively, a broker noted.