Europe weekly products: Cracks steady despite slump in Brent

London (Quantum Commodity Intelligence) - Summertime cracks for main European oil products were little changed Friday at the time of the Singapore market close despite another lurch lower in Brent prices, data from brokers shows.

The reluctance of European oil products to match the recent surge in crude has raised doubts over the speed of the recovery in oil demand at a time when refiners have started to increase run rates.

August Brent has tumbled more than $2b since Wednesday 1630 UK time.

The front month crude future slid again in Asia hours Friday and was trading at $72.80/b by the time of the Singapore close, down $0.24/b from the 1630 Thursday and a sizeable $2.14/b from 1630 UK time Wednesday.

But cracks for Eurobob E5 gasoline swaps in ARA only edged higher Friday at the time of the Singapore close, and have moved little compared to crude.

July and August cracks were pegged at just over $9/b and $9.50/b respectively, both up around $0.10/b from 1630 UK time Thursday and Wednesday.

Cracks for RBOB gasoline in New York versus Brent were following the same pattern as Eurobob.

Continuing gasoline stocks build in the US, up another 2 million barrels last week to add to the 7 million barrel gain the previous week, has caused spot Eurobob barge cracks in ARA to drop from $11.60/b in early May at the time of the Colonial pipeline shutdown to $8.26/b on Thursday.  

European distillate futures, based on 10ppm sulfur diesel in ARA, were drifting lower versus Brent despite the slump in flat prices.

Cracks for July and August Low Sulfur Gasoil futures were pegged at $7.14/b and $8.09/b respectively versus Brent, down $0.20/b and $0.15/b from Wednesday 1630 UK time.  

Paper for jet cargoes arriving in northwest European ports has also failed to respond.

July and August jet cargo cracks were pegged at $5.35/b and $6.55/b, with the front and second month both down $0.10/b.

Summertime high sulfur fuel oil barge cracks in ARA were also softer amid the crude drop.

July and August cracks were pegged at -$10.75 and -$10.20 versus Brent, each down only around $0.15/b from the market close on both Thursday and Wednesday.