European crude, products rise as dollar falls
London (Quantum Commodity Intelligence) - Oil futures bounced back Friday, led by European distillate futures rather than Brent, as the dollar softened and the market corrected from Thursday's sharp falls amid the escalation of the conflict between Israel and Hamas.
Chevron has shut down operations at the Tamar offshore platform at Israel's request, as Hamas said it targeted the natural gas field amid intensive fighting between Israel and the Gaza-ruling group.
Low sulfur gasoil futures fell more heavily than crude in the sell-off Thursday, and the front and second month future contracts gained $1.10/b by 16.30 UK time.
Front month Brent was up $0.95/b over the same time frame, although the second month contract was up only $0.87/b.
Distillate cracks will be leading the barrel most days in the second half of the year amid the recovery to normal demand levels.
Cracks for June diesel barges paper in ARA were pegged around $6.60/b but were pegged at just under $9/b for December paper, which is still historically low.
The dollar index dropped almost 0.5%.
Products
Naphtha CIF cargoes were left behind in the crude rally, gaining just $3.25/mt (36 cts/b). Propane CIF cargoes gained $6/mt and the spread below naphtha cargoes narrowed to $105.25/mt.
Premium gasoline barges traded at $650/mt, up just $2/mt ($0.24/b) from Thursday, and its crack value continued to soften versus Brent, accelerated by the re-opening of the Colonial pipeline.
Jet fuel differentials versus LSG softened as the future gained relative to Brent. Barges in FARAG were offered at $20/mt above the June contract, and the cargoes into north Europe were offered at $22/mt, as well as $2/mt below the nearby swaps curve. The jet cargo differentials dropped $1.50 to $20/mt.
Low sulfur gasoil futures outpaced Brent, reversing Thursday's move, and to revert to this month's trend line of rising cracks. Diesel barges, and diesel cargoes in the north and the Mediterranean kept pace with futures, with differentials unchanged from Thursday.
High sulfur fuel oil barge cracks resumed their falls, with the market in ARA trading at $363/mt, up just $0.50/mt from Thursday to push cracks down to minus $11.30/b. ARA fuel oil stocks fell 11% last week.
