Europe oil/products: Products lag behind recovering Brent
London (Quantum Commodity Intelligence) - Brent bounced back from early morning lows Friday to post a small gain by the European close and cement a highly volatile week, but European distillate futures trailed behind crude contrary to the recent trend.
With bears feeding off concerns over fresh Iranian barrels heading to the market, July Brent plunged to a low of $64.56/b in early morning trade, but that triggered a recovery in the front-month crude future to $66.69/b by 1630 UK time, up 39 cts/b from Thursday.
A tropical storm brewing in the Gulf of Mexico may have lifted Brent, but the oil market is also torn between tight fundamentals amid strict OPEC+ compliance, drawing down global stocks as the world recovers from the Covid-19 pandemic and concerns over the pace of the recovery and the tight rope walk between supply and demand.
Products
Naphtha cargo prices in north Europe edged higher and spot cracks were little changed. However, cracks in the forward curve softened. Earlier in the day, nearby paper cracks for naphtha in Japan softened.
Premium unleaded gasoline barges were bid at $640 and offered at $641/mt and prices barely changed, nudging up $0.5/mt. Cracks in the Eurobob swaps curve at 1630 UK time were softer to end the slight recovery seen since May 13. But gasoline cracks in Europe over the last week have largely maintained the sharp losses since May 5.
A cargo of jet fuel was sold into Le Havre at $0.5/mt above CIF cargo quotes and the flat price nudged up $0.75/mt.
Low Sulfur Gasoil futures were little changed by 1630 UK time compared to Thursday, and middle distillate cracks softened for the third time this month, although only slightly, and the trend remains bullish.
Fuel oil prices were little changed and although HSFO cracks slipped a little the market has bounced off its low on Wednesday, which marked the end of a long decline in crack values since April 15.
