Europe oil/products: Brent and Eurobob rally at end of week

23 Jul 2021

Quantum Commodity Intelligence - Brent continued to rally Friday, buoyed by Wednesday's week's US weekly oil inventory, while gasoline backwardation and cracks surged. 

The crude future was little changed over most of the day but surged again late afternoon. 

By 1630 London time, September Brent was $73.80/b, up $0.91/b from the same time Thursday.

The Rhine fully re-opened to barge traffic.


Naphtha cargo prices gained $7.75/mt ($0.87b), keeping in line with Brent. Backwardation remained wide with $10.50/mt between August and September paper. Naphtha stocks in ARA gained 25,000 mt to around 195,000 mt over the week to July 22, up from a year low on July 15, and in the thinly stocked market were only 20,000 mt down on levels in the same week in 2019. Propane cargo prices were up $8.25/mt (0.65/b), around the same as the nearby Mont Belvieu curve at the time.

Backwardation in Eurobob E5 gasoline barges jumped to $10/mt above August paper at 1630 UK time, while flat prices gained $15.50/mt ($1.86/b), amid a surge in RBOB prices. Eurobob E10 was also up $13.50/mt ($1.62/b). But premium unleaded barges, which saw stronger gains earlier in the week, were up only $10/mt ($1.20/b).

Jet cargoes traded at $29/mt above August LSGO into Le Havre, the highest differential this year, but there was also a cargo offer into Rotterdam at $26.50/mt above August LSGO. There was also a floating price trade into Le Havre at $0.50/mt above CIF cargo quotes, arriving August 13-17, reflecting the strength of the market. Jet barges were offered at $26.50/mt above August LSGO.

Diesel barge differentials versus August LSGO slightly eased from Thursday to trade at -$1/mt for back-end loading dates, and -$1.25/mt for middle window loading dates. Cargo differentials were not changed. Distillate stocks fell in ARA this week, rather than rise, despite the Rhine closure last week. Diesel and gasoil stocks held in independent tanks in the trading hub were down almost 200,000 mt to just over 2.1 million mt over the week to July 22.

High sulfur fuel oil barge cracks strengthened again Friday to reach -$8.95/mt, up from -$9.80/b a week earlier. The flat price for HSFO barges jumped $7.75/mt ($1.22/b), while the marine fuel 0.5% sulfur barge price only gained $4.75/mt. Marine fuel's discount versus Low Sulfur Gasoil futures softened to -$90.25/mt, down from -$80.50/mt on Monday.