Europe oil/products: Brent hits highs as OPEC+ nears consensus

1 Jul 2021

Quantum Commodity Intelligence - Brent futures moved sharply higher in afternoon trading in Europe Thursday, amid reports that OPEC+ is moving towards consensus to increase supplies.

The prompt North Sea market was very tight.

Backwardation between September and November Brent ballooned to $1.73/b by 1530 GMT, up from $1.43/b Wednesday. 

September Brent surged to $75.71/b at the time of the European market close, up $1.29/b from the same time Wednesday. 


Naphtha prices gained $9/mt ($1/b). Nearby backwardation remains wide. Stocks in the ARA hub edged lower to 240,000 mt over the week to Wednesday from around 255,000 mt a week earlier.

The backwardation in prompt gasoline widened, with Eurobob E5 barges trading at $5/mt above July paper, and E10 barges trading at $8/mt and $7/mt above. Premium unleaded barges traded at $721/mt ($0.90/b). MTBE traded at $822/mt. Gasoline stocks nudged higher to around 1 million mt from 930,000 mt a week earlier, according to Insights Global.

The jet cargo market was bid and offered at $20/mt above July LSG, although one was into Le Havre and the other into Rotterdam. The market also traded at $1.25/mt below forward paper, pricing end July. Jet barges in FARAG traded at $20/mt above July. Jet stocks also fell in the ARA hub, dropping to just over 1 million mt, and down from 1.15 million mt a week earlier.

Prompt loading diesel barges in ARA traded once at $1.75/mt below July LSG, while middle window dates were bid at -$1.50/mt. Liquidity remains very thin. Stocks of diesel and gasoil held in independent tanks in the trading hub dropped to 2.34 million mt, down from 2.48 million mt a week earlier, according to Insights Global.

Bids and offers in the cargo market into Amsterdam remained far apart at $3.50/mt versus $5/mt above July LSG. In the Mediterranean, there was a bid for a diesel cargo at $1/mt below forward paper for mid-July loading and $0.75/mt below for late July loading.

Gasoil 50ppm barges in ARA were bid at -$0.75/mt and offered at -$3.50/mt. Gasoil barges were bid at -$10/mt versus July LSG. Exports of diesel and gasoil exports from Tuapse in the Balck Sea will drop to 440,000 mt in July, down from 590,000 mt in June, sources said.

High sulfur fuel oil prices rose $4/mt, but cracks softened versus Brent. But marine fuel oil barge prices rose $9.25/mt, following the gains in Low Sulfur Gasoil futures. Fuel oil stocks were slightly lower in ARA, slipping to 1.44 million mt from 1.5 million mt a week earlier.