Europe oil/products: HSFO cracks surge again as Brent tops $69/b
London (Quantum Commodity Intelligence) - Brent extended recent gains to push past $69/b as the market shrugged off concerns about Iran and Covid-19 in India and focussed on the economic recovery in the US where unemployment claims dropped more than expected.
But the drivers of the market were high sulfur fuel oil and gasoline, with crack values extending Wednesday's gains.
JP Morgan cooled fears about Iranian barrels, saying any extra barrels would emerge slowly, which they estimated at 500,000 bpd by the end of this year, and another 500,000 bpd by August 2022.
By 1630 UK time, July Brent was trading at $69.12/b up $0.18 from the same time Wednesday.
Products
Naphtha prices were unchanged. Stocks in ARA rose to 323,000 mt over the week to May 27, up from 297,000 mt a week earlier, according to Insights Global.
Premium unleaded gasoline barges in AR were bid at $661 and offered at $664/mt, and the assessment at $662/mt pushed the crack higher for the second day in a row. After Wednesday's bullish EIA report, showing a 1.7 million barrel drop in US gasoline stocks, exports of gasoline from Europe are scheduled to rise next week, mostly from the Netherlands, according to Kpler data. Gasoline stocks in ARA rose by 4% over the week to May 27, said Insights Global, to stand at 1.12 million mt. But spot and nearby paper cracks remain far weaker than at the start of the month, weighed down by sagging gasoline demand in Asia.
Jet fuel barges traded at $1.50 below CIF cargoes and were also offered at $19/mt above June Low Sulfur Gasoil futures. Jet stocks were up almost 22% over the week to May 27, said Insights Global, to stand at 1.12 million mt.
Diesel barge trade in ARA was brisk with just over 27,000/mt changing hands at an average of $1.25/mt below June Low Sulfur Gasoil futures. The sulfur premium remains high with a 3,000 mt 50ppm gasoil barge trading at $1/mt below June Low Sulfur Gasoil futures, higher than the 10ppm ULSD. Gasoil and diesel stocks held in independent tanks in ARA fell 8% over the week to May 27, data from Insights Global showed, to stand at 2.2 million mt.
HSFO barge prices and cracks continued to march north, extending a recent trend, but there was little change in marine fuel (0.5% sulfur) barge prices, and the spread between the two was $105.75/mt, down $9.25/mt. Fuel oil stocks in ARA were little changed, inching higher to 1.22 million mt over the week to May 27, up from 1.214 million mt.