European refining margins recover, led by jet, fuel

European refining margins have recouped from their lows of last month, driven by a pick-up in products markets, particularly jet gas and gas, adhering to run cuts throughout the region, according to investors.

"Demand for items seasonally ought to pick up, Q2 is a lull," stated one investor Thursday.

The refining margin for Norwegian crude quality Ekofisk (basis Amsterdam-Rotterdam-Antwerp) has actually recovered from a low of $0.58/ b on Might 16, to $1.37/ b at of Thursday night, according to Platts data.

The margin for Norway's Oseberg crude is up from $1.71/ b on May 21, to $2.88/ b Thursday night, while that of Russian sour grade Urals is up from $0.95/ b on Might 22 to $3.05/ b Thursday night.

A rally in jet fuel premiums has revitalized the aviation fuel segment versus various other transport gas. The jet FOB Rotterdam barge crack to Dated Brent went to $13.13/ b Thursday, somewhat down on the day, however at the top end of a month-to-month range.

Profession resources stated July need is seasonally greater and also incrementally up year on year. However the major assistance has actually come from pockets of acquiring interest compelled to bid greater to tempt product out of tank after a period of contango market structure reduced stress on sellers.

The ultra reduced sulfur diesel Rotterdam barge split to Dated Brent shut at $11.76/ b on Thursday, reduced on the day however still greater on the month adhering to the run cuts as well as lower US and also Russian arbitrage volumes anticipated over the July period.

However, shale inhibitor drilling fluid has continued to underperform gas as well as jet fuel on the back of continued strong exports over Q1 and Q2 this year from the US and also the Baltics which have actually taxed cash money premiums.

In gas, Eurobob splits rallied Thursday as favorable view triggered a steeper backwardation out there. The balance-month June Eurobob split swap was heard passing the $13/barrel mark, while the front-month split swap was evaluated at $11.75/ b, up $0.15/ b on the day, as well as its highest level in 3 weeks.

The market's backwardation steepened even more, with the July/August spread analyzed at $14/mt, up from $10.25/ mt the previous day.

"Hearing that ARA containers are rather vacant," claimed a gas trading source, referring to fuel stock degree issues in the Amsterdam-Rotterdam-Antwerp area.

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