Rotterdam diesel barge premium at near 4-month high on gasoil contango

Rotterdam diesel barge premium at near 4-month high on gasoil contango

The Rotterdam 10 ppm diesel barge premium to benchmark gasoil futures reached its highest level in almost four months Monday, as a steep gasoil contango structure, lower outright prices and tighter supply sentiment for September continued to incentivize diesel storage in the Amsterdam-Rotterdam-Antwerp region.
 
"Flat price has collapsed and there has been some increase in German demand so storage makes sense with the [gasoil] structure," said one barge trader.
 
FOB Rotterdam barges of ultra low sulfur diesel were assessed by Platts at a $17.25/mt premium to front-month ICE 0.1% gasoil futures, making it the strongest premium since April 20.
 
The outright ULSD price, which takes into account the lower ICE gasoil futures level, was assessed at $870.50/mt, the lowest in over two years as ample crude supplies and flows from outside the region suppressed the benchmark.
 
ICE gasoil futures have maintained a wide contango structure between the front and second-month contracts for the past week, to be assessed Monday at $4.50/mt, up from $3.50/mt a week previously, making storage economics increasingly workable. As a result, competition for ullage within the ARA hub has been increasing, with traders looking to lock in lower distillate prices for prompt delivery.

Source：Platts

Date：2014.8.20