Low ULSD volume left for delivery in ARA after April LSG expires

London (Quantum Commodity Intelligence) - April Low Sulfur Gasoil future expired on Monday on the ICE exchange to leave 1,319 lots, or 131,900 mt of ultra low sulfur diesel, for delivery into the ARA hub over the second half of the month, data from the exchange shows.

The open interest volume for delivery was the lowest since the expiry of the December contract, when just 300 lots were left.

The April contract settled at $503.75/mt.

The nearby Low Sulfur Gasoil futures curve remains in contango between May and October contracts.

Demand for road diesel has been undermined by the third wave of Covid-19 sweeping Europe, and the structure of the curve continues to keep storage high in ARA.

Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 1% in the week to April 8 to 2.33 million tonnes, data from Dutch consultancy Insights Global showed, but this still left them above theior five-year average. 

But refining margin profitability for ultra low sulfur diesel in ARA was improving up to the expiry. 

Crack levels for versus Brent futures for diesel barges loading in ARA were pegged at $4.46/b on April 9 and $4.28/b on April 8, up from $3.52/b on March 31, according to Quantum data.