Products: Muted Response to Lower Primorsk ULSD Loadings

Copyright © 2023 Energy Intelligence Group All rights reserved. Unauthorized access or electronic forwarding, even for internal use, is prohibited.

Europe’s diesel market took Russia’s lower June-loading program in its stride as huge volumes of fuel began arriving from East of Suez suppliers hoping to cash in on Europe’s post-Covid-19 recovery. Just 1.257 million metric tons of ultra-low-sulfur diesel (ULSD) is currently due to load from Russia’s main Baltic port of Primorsk in June with traders blaming late Russian refinery maintenance and firm domestic buying as the agricultural season finally gets under way. Loadings are down almost 20% on revised May volumes which hit 1.57 million tons after two Rosneft cargoes and one Gazpromneft shipment totaling 134,000 tons were added to the loading schedule at the end of the month. Market watchers say there could be similar late additions this month with Russian sellers loath to miss out on any recovery in European road fuel demand. Indicative driving route requests are racing almost 20% ahead of pre-Covid-19 levels in all of Europe’s key fuels markets, according to Apple Mobility Data, as more Covid-19 restrictions are lifted. ULSD cargoes were pegged at a $4 per ton premium to front-month ICE low-sulfur gasoil futures at the Jun. 1 close, barely changed from $3.75/ton a week ago. Road fuels are firming against crude with margins now close to a 10-month high. ULSD supplies are mounting from East of Suez as producers also target the European market. Gasoil tanks in Amsterdam-Rotterdam-Antwerp (ARA) jumped 8% to a six-week high of 2.2 million tons last week, according to Insights Global, after tankers discharged from Russia, Saudi Arabia and the United Arab Emirates. Trafigura’s very large crude carrier (VLCC) Hunter should show up on the balance sheet this week -- the tanker is still discharging in Rotterdam -- and will soon be joined by the trader’s VLCC Sur, which is carrying jet fuel as well as ULSD. Another Trafigura VLCC, the Dickens, is no longer heading to Europe. Shipping sources says it is discharging via ship-to-ship transfer offshore West Africa instead with the smaller tankers heading mainly to Brazil. Similar scenes are playing out in Europe’s jet fuel market ahead of the Jul. 1 launch of the EU’s Digital Covid Certificate as overseas suppliers rush to meet burgeoning demand. ARA jet tanks leapt by more than a fifth to nearly 1.2 million tons on May 27, after tankers from Russia, India and the UAE all discharged. That is the second-highest level ever seen and only fractionally below last November’s peak. Product Prices $/ton, c.i.f. basis Jun 1 '21 May 25 '21 Chg. ICE LS Futures (front month) 573.00 558.50 14.50 ICE LS Futures (second month) 574.50 560.00 14.50 0.1% Gasoil NWE* 574.75 558.75 16.00 0.1% Gasoil Med* 568.75 552.75 16.00 10 ppm Diesel NWE* 575.25 559.75 15.50 10 ppm Diesel Med* 576.50 561.00 15.50 HSFO NWE* 377.00 361.00 16.00

Oil Demand, Oil Inventories, Oil Supply, Oil Tankers
Wanda Ad #2 (article footer)
Novatek’s plans to build the new Murmansk LNG plant reflect Moscow’s sanctions-driven shifts in its gas export strategy.
Wed, May 31, 2023
Bilateral discussions over production policy are heating up before Sunday's official Opec-plus ministerial meeting.
Sat, Jun 3, 2023
Data from the EIA show that US crude shipments have jumped by 1,100% since export restrictions were lifted in 2015 to a record 4.8 million barrels per day in March.
Fri, Jun 2, 2023