Russia's exports of diesel from Primorsk to drop for fourth month in a row

Quantum Commodity Intelligence - Exports of Russian ultra low sulfur diesel from the Baltic port of Primorsk will drop in July, extending falls since April, and slightly tightening the European distillate market, sources said Wednesday, citing the preliminary loading program.

Some 1.1 million mt is scheduled to load next month, down 155,000 mt from July's figure of around 1.25 million mt.

In May, the loading program was 1.436 million mt, and in April, the program was 1.525 million mt.

Differential prices for diesel cargoes arriving into northwest Europe above Low Sulfur Gasoil futures have nudged higher recently to reflect the drop in July.

Two cargoes were sold into Amsterdam at $4/mt and $4.25/mt above July Low Sulfur Gasoil futures Tuesday, while last Thursday, the market was offering cargoes into the port at $3.50/mt above the front month distillate future.

The north European diesel market has been lacklustre in June amid an inflex of cargoes arriving from the US Gulf and east of Suez.

Despite the drop in Primorsk exports, cracks for July diesel barge paper in ARA versus September Brent have fallen from around $1.15/b over the month to reflect the underlying softness.