sample copy of Argus European Products

Argus European Products
Daily European product market prices, news and analysis
Issue 14-150 Tuesday 5 August 2014
prICES
Market Commentary
Gasoline cargoes
Northwest Europe light products
Gasoline cargo values fell once again on Tuesday as lacklustre demand and oversupply are met with similar conditions
in the US, cutting off export opportunities.
US summer demand appears to be tapering off already,
and with high supplies and stocks and an open arbitrage
from the Gulf coast to New York Harbour, there is little
demand for European cargoes, shutting off the arbitrage at a
time when bookings should be at a summer peak. No cargoes
were confirmed booked from Europe to the US on Tuesday,
but Pemex’s trading arm PMI was trying to charter at least
one tanker to go to Mexico, according to shipping lists.
The arbitrage flow to west Africa is busy at the moment
as companies fill Nigeria’s third quarter import quotas. On
Tuesday Vitol confirmed the Maetiga to load at Lavera in the
south of France on 5 August. That fixture means a total of at
least nine cargoes have been booked totalling 465,000t have
been confirmed booked in just a few days.
In the Mediterranean, Saudi Aramco booked the UACC
Doha to load a 37,000t cargo at Sarroch in Sardinia on 8
August, bound for Jeddah.
No cargoes were bid or offered during the late afternoon trading window once again, reflecting current liquidity
levels.
$/t
Low
High
±
fob
Mogas 95R 10ppm
936.00
936.50
-6.75
Mogas 91R
926.00
926.50
-6.75
-7.00
cif
Mogas 95R 10ppm
946.00
946.50
Mogas 91R
936.00
936.50
-7.00
Naphtha 65 para
856.00
858.00
-25.00
1,009.00
1,009.50
-7.00
barge
Mogas 98R
Mogas 95R 10ppm*
16.00
Eurobob oxy
936.00
936.50
-7.00
Eurobob non-oxy
936.00
936.50
-7.00
Mogas 91R
936.00
936.50
-7.00
1,108.25
1,108.75
-8.25
858.00
-25.00
MTBE
MTBE factor
Naphtha 65 para
1.18
856.00
*differential to Eurobob oxy midpoint
West Mediterranean light products
$/t
Low
High
±
fob
Mogas 95R 10ppm
943.00
943.50
-6.75
Naphtha 65 para
838.50
840.50
-24.75
Mogas 95R 10ppm
951.50
952.00
-7.00
Naphtha 65 para
847.00
849.00
-25.00
cif
Ice settlements
Contract
S/t
Eurobob oxy gasoline barges
1,100
Gasoil
Brent 1-minute
$/t
$/bl
Aug
869.50
-
Sep
872.50
-
Oct
876.50
104.85
1,075
1,050
contents
1,025
Gasoline1
Middle distillates
2
Fuel oil and VGO
3
Bunkers4
News7-8
Deals done
9-10
Month-to-date averages
11
Swaps and announcements
12
Freight13
1,000
975
950
925
07 May 14
06 Jun 14
Copyright © 2014 Argus Media Ltd
07 Jul 14
05 Aug 14
Argus European Products
Issue 14-150 Tuesday 5 August 2014
Northwest Europe middle distillates
Gasoline barges
Gasoline barge prices continued to fall on Tuesday. The
volume-weighted average Eurobob oxy grade barge price fell
by another $7/t to $936.25/t. Liquidity rose, and 22,000t was
traded in total, 14,000t of it at prompt Argus loading dates.
BP sold 10,000t of Eurobob oxy grade product.
Gasoline’s notional barge crack spread against Ice September Brent crude stayed almost unchanged at $6.57/bl,
compared with $6.51/bl on Monday, but down by around $3/
bl in less than a fortnight.
Naphtha
European naphtha was assessed at $857/t cif Rotterdam on
Tuesday, down by $25/t. The notional discount to Ice September Brent widened by $3.05/bl to $7.94/bl.
For the second consecutive day no trades or bids were
recorded during the afternoon’s trading window, with offers
made for delivery between 15-30 August. Trafigura offered
a 12,500t cargo at $858/t cif Rotterdam, the lowest of the
session, for 15-19 August delivery. Gunvor, BP and Shell also
placed offers for 15-19 August delivery.
The market is oversupplied in northwest Europe, with
little buyers remaining elusive. Prompt supplies of open
specification grade naphtha are now valued at discounts of
$2-4/t to spot quotes. Light virgin naphtha values have also
become depressed, valued in the wide range of +$6-14/t to
spot quotes depending on quality.
No new cargoes were heard booked to be delivered to
Asia-Pacific from northwest Europe, despite a wider Asia-Pacific premium to northwest Europe. Statoil has chartered the
Nord Observer to load a 35,000t cargo from the northwest
Europe on 6 August, for delivery within the region.
Regional trading in the Mediterranean was also thin, with
no new shipments seen for Lavera’s petrochemical hub. With
few options to sell regionally, traders are planning to deliver
more Mediterranean supplies to Asia-Pacific, with enquiries
for tankers available for loading dates as far forward as 30
August heard. Vilma Oil has chartered the Mariner A to load
a 30,000t from the Black Sea port of Tuapse on 11 August, to
be delivered to the Mediterranean.
Ice
mth
fob
Jet
Diesel French 10ppm
Diesel German 10ppm
Heating oil 0.1%
Heating oil German 0.005%
cif
Jet
Diesel UK ULS
Diesel French 10ppm
Diesel German 10ppm
Heating oil 0.1%
Heating oil German 0.005%
Gasoil Russian
barge
Jet
Diesel German 10ppm
Heating oil 0.1%
Heating oil German 0.005%
Low
-
High
Low
High
±
-
-
937.50
877.50
880.50
862.00
870.00
938.50
878.50
881.50
863.00
871.00
-10.25
-10.25
-10.25
-10.25
-10.25
Aug
Aug
Aug
Aug
Aug
Aug
Aug
+78.00
+22.00
+18.00
+21.00
+2.50
+10.50
+2.00
+79.00
+23.00
+19.00
+22.00
+3.50
+11.50
+4.00
947.50
891.50
887.50
890.50
872.00
880.00
871.50
948.50
892.50
888.50
891.50
873.00
881.00
873.50
-10.50
-10.50
-10.50
-10.50
-10.50
-10.50
-10.50
Aug
Aug
Aug
Aug
+78.00 +78.50 947.50 948.00 -10.50
+13.00 +13.50 882.50 883.00 -12.00
-3.25
-2.75 866.25 866.75 -10.50
+10.00 +11.00 879.50 880.50 -12.00
West Mediterranean middle distillates
$/t
Differential
Ice
mth
fob
Jet
Diesel French 10ppm
Heating oil 0.1%
Gasoil Russian*
cif
Jet
Jet diff to fob Med
Diesel French 10ppm
Diesel 10ppm diff to spot
Heating oil 0.1%
Gasoil Russian
Aug
Aug
Aug
Aug
Low
High
-
-
Low
High
930.25
885.50
866.50
857.50
931.25
886.50
867.50
859.50
±
-10.25
-11.25
-10.25
-10.00
+82.00 +84.00 951.50 953.50 -10.50
+21.25 +22.25
- -0.25
+24.50 +25.50 894.00 895.00 -11.50
+0.00 +2.00
- +0.00
+5.50 +6.50 875.00 876.00 -10.50
+2.00 +4.00 871.50 873.50 -10.50
*fob Tuapse/Novorossiysk
French diesel cargo
$/t
970
960
950
Jet
Jet fuel prices fell sharply with Ice gasoil futures on Tuesday, while barge and cargo premiums held firm at $78.25/t
and $78.50/t to August gasoil respectively.
Discussions in the barge market were slightly more active
on Tuesday. Six bids were reported during the afternoon session, with Shell looking for five barges loading in AntwerpRotterdam-Amsterdam (ARA) and BP for one barge loading in
FARAG. Amid gasoil related bids within Argus forward dates,
BP and Shell bid for two barges loading in FARAG and ARA
Copyright © 2014 Argus Media Ltd
$/t
Differential
940
930
920
910
900
890
880
07 May 14
Page 2 of 13
06 Jun 14
07 Jul 14
05 Aug 14
Argus European Products
Issue 14-150 Tuesday 5 August 2014
8-12 August at $77/t to August Ice gasoil.
Refineries in Europe continue to maximise their jet fuel
production as jet cracks have reached their highest level so
far this year. But strong seasonal demand has contributed
to support premiums. Shell was also in the market for two
barges loading in ARA 14-18 August and 16-20 August at
+$75/t to August gasoil, suggesting prompt loadings continue
to command a higher premium. Premiums were assessed
unchanged at $78.25/t, with bids remaining below Monday's
assessed level.
The cargo market remained quiet but premiums held
strong amid steady demand. Shell emerged amid the bidders
with a 30,000t cargo for delivery to Rotterdam 19-23 August
at +$79/t to August gasoil. Morgan Stanley and BP bid for
two cargoes loading in Le Havre 15-30 August and Rotterdam
15-20 August at $78/t to August. The BP bid was within Argus
forward dates and included for assessment. Cargo premiums
were assessed at between $78/t and $79/t to August gasoil.
Outright prices fell with $10.50/t losses in the August gasoil
contract, which settled at $869.50/t.
BP booked the Silvaplana provisionally to load a 90,000t
cargo from Kuwait to Europe at the end of August.
Northwest Europe fuel oil and VGO
$/t
Low
High
±
-8.25
fob
Fuel oil 1%S
567.00
571.00
Fuel oil 3.5%S
538.50
542.50
-5.75
Fuel oil straight-run 0.5%S
675.50
678.75
-5.88
+0.00
Fuel oil straight-run 0.5%S* $/bl
-6.25
-5.75
716.50
720.00
-9.38
-0.25
+0.25
-0.50
684.00
687.50
-16.13
-4.25
-3.75
-1.50
Fuel oil 1%S
582.25
586.25
-8.25
Fuel oil 3.5%S
553.75
557.75
-5.75
Fuel oil straight-run M-100
575.75
578.75
-5.75
Fuel oil straight-run M-100†
+16.00
+19.00
+0.00
VGO 0.5%
723.25
726.75
-9.63
VGO 1.6%
684.00
687.50
-16.13
VGO 0.5%
VGO 0.5%* $/bl
VGO 1.6%
VGO 1.6%* $/bl
cif
barge
Fuel oil 1%S
566.50
567.50
-10.50
Fuel oil 3.5%S RMG
557.75
561.75
-5.75
Fuel oil VWA
559.75
3.5%S RMK
547.25
-5.75
-5.75
3.5%S RMK diff to RMG
-12.50
+0.00
VGO 0.5%
716.50
720.00
-9.38
VGO 1.6%
684.00
687.50
-16.13
Heating oil cargoes
* differential to Brent crude futures ($/bl) †premium to barge VWA
European heating oil trading was again muted, though export bookings to west Africa surfaced from Europe.
The market is in a holiday lull, with little demand, not
much attention from traders and a general uncertainty
about the outlook for later in August and early September.
Expectations for robust imports from the US Gulf continue, though tightness in South America could pull the cargoes
in that direction instead.
Shipbrokers reported a number of 40,000t cargoes going
from Europe to west Africa, including aboard the Elixir, the
BW Cheetah and the Hafnia Crux, booked by Nyala, BP and
Litasco, respectively.
Other fixtures showed gasoil going from the Black Sea
and Baltic to Europe, including aboard the FD Seawish and
the Dominia.
During afternoon trade, Vitol was the only company to
emerge in either northwest Europe or the Mediterranean. It
offered one 18,000t cargo basis Le Havre at a 50¢/t discount
to spot prices, and two 25,000t cargoes basis Genoa at $1/t
below spot and August +$13/t.
Assessed premiums were unchanged, but prices slipped
with a $10.50/t loss in Ice August gasoil.
West Mediterranean fuel oil and VGO
$/t
Low
High
±
fob
Fuel oil 1%S
576.00
580.00
-8.00
Fuel oil 3.5%S 0.998
538.00
542.00
-5.50
VGO 0.5%
716.50
720.00
-9.38
VGO 1.5%
690.75
694.25
-9.38
cif
Fuel oil 1%S
587.75
591.75
-8.25
Fuel oil 3.5%S 0.998
549.75
553.75
-5.75
Ice crude futures - 16:30 London time
Month
Brent 1-minute marker
Oct
$/bl
Value
±
104.85
-0.87
Eurobob oxy differential to diesel barges
160
S/t
German diesel 10ppm barges = 0
140
120
100
80
60
40
07 May 14
Copyright © 2014 Argus Media Ltd
Page 3 of 13
06 Jun 14
07 Jul 14
05 Aug 14
Argus European Products
Issue 14-150 Tuesday 5 August 2014
Diesel cargoes
Bunkers
European diesel prices trade was muted, though one deal
concluded in northwest Europe.
Buyers in Germany and the UK continued to seek cargoes
to cover their needs, while trade elsewhere in the market was notably quiet. Mediterranean trading in particular
slowed on Tuesday, with the only two bids to surface during
the afternoon session withdrawn before the close.
The focus remained on expected August and September
imports. The US Gulf is exporting as much as 1.7mn t in
August, though a tight South American market could pull in
some of those cargoes.
Valero provisionally booked the CPO Singapore to carry
38,000t of diesel from the US Gulf with delivery options to
Chile or Europe.
Traders expect many cargoes to end up in Europe, with
most expected northwest Europe as the first port of call.
Elsewhere, refinery output within Europe is expected to
increase at least slightly in the Mediterranean, which should
help cover local needs.
But upcoming refinery turnarounds in Russia loom,
leading some to expect pockets of market tightness in the
coming weeks.
During afternoon trade, Gunvor came forward to buy an
18,000t offer of German summer diesel from Shell at a 50¢/t
discount to spot prices. The cargo is for Hamburg delivery
from 16-23 August.
The only other seller, Litasco, offered a 27,000t Amsterdam-basis cargo of French summer diesel at a $1.50/t
discount to mean spot prices.
Once again, bids from Glencore, Trafigura, Morgan Stanley and Gunvor sought UK and German delivery for cargoes,
largely priced versus spot indications. Morgan Stanley’s August +$17/t bid for 18,000t of German diesel basis Hamburg
was the only exception.
Assessed premiums held steady. Prices slipped with a
$10.50/t loss in Ice August gasoil.
The Mediterranean was notably quiet. ERG withdrew its
two bids for 25,000t of French summer diesel, both at September +$16/t. No sellers or other buyers came forward.
Assessed premiums slipped by $1/t to August +$25/t.
$/t
Low
High
±
180cst 1.5%S
609.00
614.00
-1.00
180cst 3.5%S
592.75
597.75
-1.25
380cst 1.5%S
577.50
582.50
+0.00
380cst 3.5%S
564.25
569.25
-0.75
Rotterdam dob
Antwerp dob
180cst 1.5%S
607.00
612.00
-3.00
180cst 3.5%S
595.00
600.00
-2.00
380cst 1.5%S
577.25
582.25
-4.25
380cst 3.5%S
563.50
568.50
-6.00
Gasoline premium to naphtha cif NWE
$/t
Naphtha cif NWE = 0
130
120
110
100
90
80
70
60
50
40
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Diesel and heating oil barges
Gasoil barge prices fell on Tuesday, as both Ice August gasoil
futures and premiums to August gasoil were lower.
Premiums for 50ppm sulphur heating oil barges fell
by $1/t and diesel barge premiums fell by $1.50/t, while
discounts for 0.1pc sulphur heating oil remained unchanged.
Ice August gasoil futures declined by $10.50/t, to settle at
$869.50/t by 16:30 BST, bringing outright values lower.
Vitol sold two 2,000t barges of 0.1pc sulphur heating oil
Copyright © 2014 Argus Media Ltd
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Argus European Products
Issue 14-150 Tuesday 5 August 2014
to Noble Energy at a $3/t discount to August gasoil for 9-13
August loading. A total of 9,200t of diesel was traded on
the barge market at a volume-weighted average $13.25/t
premium to August gasoil. Morgan Stanley bought all five
barges traded, with sellers consisting of Litasco, Gunvor and
Licorne.
No trades were completed in the market for 50ppm sulphur heating oil barges. A bid was heard at +$9/t to August
gasoil, with an offer at +$12/t.
High-sulphur fuel oil cargoes
610
600
590
580
570
560
High-sulphur fuel oil cargo prices dropped on Tuesday, tracking a $5.75/t decline in barge prices. Arbitrage economics
for cargoes on the Rotterdam to Singapore route strengthened as Asian prices declined less sharply.
BP was seeking a tanker for a 130,000t fuel oil cargo
loading at Rotterdam on 10-15 August to take to Singapore,
according to shipping sources. Aramco was seeking a vessel
for an 80,000t cargo loading at Agio Theodoroi on 15-17
August to take to Yanbu.
Arbitrage economics for shipments on the Rotterdam to
Singapore route strengthened as the September Singapore
fuel oil swap premium to barge prices in Rotterdam widened
by $3.75/t to $28.25/t, compared with the freight cost of
about $21/t for a Suezmax vessel sent along this route.
550
07 May 14
06 Jun 14
07 Jul 14
LSFO cargo differential to 3.5pc barges NWE
70
05 Aug 14
$/t
3.5% S = 0
60
50
40
30
Low-sulphur fuel oil cargoes
The premium for low-sulphur fuel oil cargoes to high-sulphur
Rotterdam barge values narrowed to the least since October
on Tuesday with ample supplies and weak demand.
Supplies have increased sharply in recent weeks with
refiners in the Mediterranean processing sweeter crudes
with more Libyan product available in the market. And LSFO
buying interest in the region remains low. The mild contango
in the swaps market continues, highlighting prompt weak demand. The high-low sulphur spread — the low-sulphur cargo
premium to high-sulphur Rotterdam barges — narrowed by
$2.50/t to $9.25/t, the tightest spread since 9 October.
No trades were reported during the afternoon window.
20
10
0
07 May 14
06 Jun 14
07 Jul 14
0.5pc VGO differential to 1.6pc VGO NWE
50
05 Aug 14
$/t
VGO 1.6% NWE fob = 0
40
Straight-run fuel oil cargoes
Straight-run fuel oil assessments were unchanged on Tuesday. Trading activity was thin, but some limited buying on
low-sulphur cargoes was heard in northwest Europe.
A LSSR cargo deal was heard done in northwest Europe
but details remained scant. There were some suggestions
the price was at similar levels to recent late window deals,
at around $6-7/bl discount to Ice October Brent, but this information could not be immediately confirmed. New activity
was seen on the export front, with two transatlantic cargoes
Copyright © 2014 Argus Media Ltd
$/t
High-sulphur fuel oil barges VWA
30
20
10
0
07 May 14
Page 5 of 13
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05 Aug 14
Argus European Products
Issue 14-150 Tuesday 5 August 2014
seen booked from Algeria. It was not clear whether these
were spot or contract cargoes. Freepoint and Valero each
booked an 80,000t cargo to load at Algeria on 10-15 August.
Low-sulphur straight-run fuel oil cargoes, typically with
0.5pc sulphur, were assessed steady at -$6/bl to Ice October
Brent on a fob northwest Europe basis. Outright prices fell
by 87¢/bl in line with the crude contract which traded at
$104.85/bl at 15:30 GMT.
M100 straight-run fuel oil cargoes were still at $16-19/t
premiums to Rotterdam barges, delivered to northwest Europe. Outright prices were down by $5.75/t with barges.
Vacuum gasoil
High-sulphur vacuum gasoil assessments were driven down
by another late trading window deal. Weak buying interest
in Europe and marginal export economics for export to the
US Gulf weighed on both the high- and low-sulphur markets.
BP sold Petroineos another cif Rotterdam 15,000t highsulphur vacuum gasoil cargo, the second in less than a week,
during the late afternoon window. The sale concluded at
-$4.70/bl to Ice October Brent, $1.60/bl lower than the previous trade. The cargo was for 15-19 August delivery and had
the following specifications: density max 0.925, sulphur max
2pc, CCR max 0.4pc, flash min 100, pour max 39, nitrogen
max 1500, sodium max 1ppm, nickel max 1ppm, vanadium
max 1.5ppm, iron max 1.5ppm, tan max 0.5, asphaltenes
max 700pmm.
A trading firm bought a 15,000t low-sulphur vacuum gasoil cargo at flat to October Brent on a cif northwest Europe
basis, according to market participants. The delivery dates
and the specifications of the cargo remained unconfirmed,
but there were suggestions that the cargo was of below
standard quality.
Export economics to the US remain marginal. Netback
values erased a 25¢/bl gain seen on Monday after a 50¢/
bl fall in US Gulf assessments and a 25¢/bl narrowing in the
Brent/WTI spread, calculated at around $7.50/bl. Low- and
high-sulphur calculations were at around 25¢/bl and -$1.75/
bl to Ice October Brent, respectively. Cargo trading in the
US is still limited, but some Atlantic coast buying interest
at $2-3/bl premiums to Ice September Brent was heard.
Oversupply is still weighing on prices, with an oil major with
an FCC outage at its Texas-area refinery still offering barges
into the region.
As a result of the late window cargo deal and falling netback values for export to the US, high-sulphur vacuum gasoil
fob and cif assessments fell to -$4/bl to Ice October Brent,
a decrease of $1.50/bl. Prices were assessed at a premium
of around $0.50-0.75/bl to the late window trading level of
-$4.70/bl to reflect the high metal and asphaltene levels in
the cargo.
Copyright © 2014 Argus Media Ltd
Falling netback values also led to weaker low-sulphur fob
assessments which lost 50¢/bl to be assessed at flat to October Brent. The fob/cif premium was steady at $1/bl.
A company that was offering a 15,000t of high-sulphur
vacuum gasoil cargo on a fob Tarragona basis is now offering
the cargo into the Amsterdam-Rotterdam-Antwerp region
at -$1/bl to Ice October Brent on a cif basis. The cargo had
the following specifications 2.9pc sulphur, density 0.930 and
618ppm asphaltenes. The firm is offering into northwest
Europe in the absence of any bids in the Mediterranean. But
a number of market participants pegged the Mediterranean
high-sulphur market stronger than the level of the MOC deal
on Tuesday. As a result of these indications, Mediterranean
fob quotes were indicated at a $1/bl premium to northwest
European quotes.
Fuel oil barges
High-sulphur fuel oil barge prices declined on Tuesday but
were little changed relative to Brent crude futures.
A total of 34,000t of standard finished bunker grade
RMG high-sulphur fuel oil was traded at $558-561.50/t, down
from trades at $564.50-566.25/t on Monday. Liquidity fell
from 40,000t traded on Friday. The notional high-sulphur
barge discount to Ice September crude futures widened by
just 1¢/bl to $17.45/bl as Ice September Brent lost 88¢/bl to
$104.23/bl by 15:30 GMT.
Assessed RMK discounts to RMG barges were little
changed at $12.50/t, based on price discussions around this
level. Supplies are expected to increase later this week with
no cargoes currently being loaded for export to the AsiaPacific region.
Low-sulphur fuel oil barge prices sank by $10.50/t with
a 1,000t trade at $567/t, compared with price discussions
yesterday at $573-582/t.
Page 6 of 13
Argus European Products
Issue 14-150 Tuesday 5 August 2014
News
Outlook: Jet price buoyed by demand growth
Jet fuel prices are set to continue trading at relatively high
levels during the second half of 2014 as global air travel demand improves. Geopolitical tensions will keep the chance
of short-term price spikes in the picture.
World air passenger traffic is on course for steady growth
into 2016, according to the International Civil Aviation Organisation. The ICAO forecasts passenger traffic - measured
in passenger-kilometres performed (PKP) - will increase by
6pc in 2014, by 6.3pc in 2015 and by 6.5pc in 2016.
Freight traffic is also expected to increase by 3.7pc,
4.2pc and 4.4pc in 2014, 2015 and 2016 respectively, from
the dismal 0.4pc growth recorded in 2013.
The brunt of the growth will come from carriers in the
Middle East, with an estimated growth rate of 11.6pc this
year. But the ICAO predicts European passenger traffic will
rise by 5.4pc in 2014. “Europe’s general economy has shown
steady improvement in the first half of the year and the recovery trend is expected to continue in the coming months,”
the ICAO said.
The price of jet fuel traded in a relatively narrow and
high range between July 2013 and July 2014. Cif northwest
Europe prices averaged around $124/bl over the period, with
short-term spikes caused by geopolitical concerns. Jet fuel
cargo prices recently spiked in northwest Europe, reaching $128/bl in mid-June as tensions in Iraq drove up crude
prices. Concern over Ukraine also translated into jet fuel
price increases in mid-May.
Geopolitical tensions are set to continue to pressure oil
prices upward in the coming months. Combined with rising
oil demand – on the back of improved economic data from
China especially - this sets the scene for higher jet fuel
prices. But there is caution about China, as the Chinese
economic growth is seen weakening by airline industry body
Iata.
Storage economics could also come into play. A widening
contango in Ice gasoil - on which jet fuel prices are calculated - would encourage a building of stocks, keeping product
off the spot market, and pushing jet fuel prices up.
The European market remains highly dependent on jet
fuel bookings from Asia and the Mideast Gulf, which account
for 80pc of Europe’s imports. And Europe’s jet fuel deficit
is set to grow as more refineries cut runs or close because
of weak margins. Since 2009, domestic European jet fuel
production has decreased by 1.5mn t/yr and, in 2013, over
a third of Europe’s jet fuel demand was met by imports, according to Citi bank.
But airlines focus increasingly on fuel efficiency measures to reduce their consumption, since jet fuel accounts
for around 30pc of their operating costs. Older aircraft are
gradually retired and replaced by fuel efficient airplanes.
More than half of the 1,400 new airplanes ordered by airlines
worldwide come as a replacement for older equipment, according to Iata.
Airlines also tend to maximise load factors in order to
increase profitability. Air Berlin, the second-largest airline
in Germany, consumed 3.3 litres of jet fuel for each 100
passenger kilometres in 2013, and reduced its jet fuel use
by 25pc over 20 years. That said, the IEA still sees transport
sector oil use, including air transport, rising steadily through
2019, as traffic growth offsets fuel efficiency measures.
Outlook: M100's decline weighs on Europe SRFO
The straight-run fuel oil market was under pressure in the
first half of the year — particularly for heavy grades — and
that pressure will continue as US and Chinese refiners take
less heavy sour Russian feedstock, exploiting access to new
crude sources.
Transatlantic shipments of Russia's high-sulphur straightrun fuel oil blend M-100 have fallen sharply this year. US
refiners had typically been large consumers of alternative
feedstocks from Russia, and complex Gulf coast plants
Announcement
Argus successfully completes Iosco assurance review
Argus has successfully completed an external assurance review of its oil price benchmarks, including those for petroleum
products markets. The review was carried out by professional services firm PwC. An independent and external review of
oil benchmark prices is required on an annual basis by international regulators in order to satisfy Iosco’s Principles for Oil
Price Reporting Agencies (the PRA Principles).
For more information and to download the report visit our website http://www.argusmedia.com/About-Argus/How-We-Work
Copyright © 2014 Argus Media Ltd
Page 7 of 13
Argus European Products
Issue 14-150 Tuesday 5 August 2014
News
take 80-90pc of US-bound M-100 shipments. M-100 largely
comes from atmospheric distillation of medium sour Urals
crude and usually has a 3pc sulphur content. But imports of
unfinished residue from Russia — which include straight-run
fuel oil — were just under 100,000 b/d in January-April, less
than half the levels seen in 2013, EIA data show. By contrast,
vacuum gasoil (VGO) imports have risen to 130,000 b/d,
more than double the amount shipped three years ago.
Rising shipments of heavy Canadian crude are edging out
M-100 from the US feedstock slate. Independent PBF Energy
has stopped importing M-100 for its 180,000 b/d Paulsboro and 190,000 b/d Delaware City refineries on the east
coast, as it takes more heavy Canadian crude. And Valero
has halted straight-run fuel oil imports to its 200,000 b/d
Corpus Christi refinery in Texas, as it maximises runs of light
sweet Eagle Ford crude. M-100 is also a feedstock in bitumen
production, and is being edged out of the US by shipments
of bitumen from Canadian oil sands projects. As heavy crude
production in North America continues to rise, this trend is
expected to continue in the second half of the year.
Russia receives more money for M-100 sales in AsiaPacific, where it trades roughly $120/t above the market
in northwest Europe. M-100 is popular with independent
Chinese refineries that do not have licences to import crude.
But demand is shrinking, as crude becomes available to
more refiners. Beijing granted a licence to ChemChina nearly
two years ago to import 200,000 b/d of crude, and the firm
has been processing more Russian ESPO Blend lately. China's
M-100 imports fell by 30pc to just under 100,000 b/d last
year. And with the possibility of crude import licenses being
extended to more independent refineries in China, the country's M100 imports are expected to fall further.
Russian refiners export M-100 because fuel oil export
tariffs are still only 66pc of the value of the tariff for crude.
Mini refineries put Urals crude through light distillation processes to benefit from the tax differential. Moscow plans to
equalise the two rates to encourage refiners to upgrade and
process more crude domestically. The move could be made
next year, although no firm date has yet been announced.
Russian straight-run fuel oil exports - mostly from Black
Sea and Pacific ports - will fall by around 85pc by 2020 as a
result, according to Russian state-controlled Rosneft. Russian M100 supplies tightened during the spring with Russian
refinery maintenance, which gave some support to premiums
to barges. But decreased exports to the US Gulf and Asia
Pacific capped further gains in premiums.
Unrest has kept Libya's 220,000 b/d Ras Lanuf refinery
shut, cutting around 70,000 b/d of good quality low-sulphur
Copyright © 2014 Argus Media Ltd
straight-run exports from the plant. But a deal reached in
early July to reopen the Ras Lanuf and Es Sider crude export
terminals are expected to pave the way for the return of the
refinery to operational status. The return of Libyan exports
will have a bearish impact on LSSR prices because Libya
was forced to import the product for power generation as
it faced domestic refinery shutdowns. According to stateowned NOC officials, Libya was importing around 50pc of its
consumption. Libya consumed around 1.56mn t of LSSR for
power generation in 2012 according to NOC figures.
Neste's profits drop on margins, maintenance
Finland-based Neste Oil's profits fell by 58pc in the second
quarter compared with the same period last year because of
weaker refining margins and an unscheduled 40-day maintenance outage on the diesel production line 4 at its 197,000
b/d Porvoo refinery.
The company's profit was €38mn ($50.1mn) in the AprilJune period, compared with €90mn a year earlier. Neste's
total refining margin, which includes actual product yield
and feedstocks, actual sales distribution, the impact of
changing values of stocks and other factors, averaged $8.35/
bl, down from $8.82/bl in the second quarter of 2013. The
reference refining margin used by the firm was at $4.20/bl,
down from $5.70/bl a year earlier.
“Oil Products' reference refining margin was at its lowest
in May, as diesel imports to Europe continued to run at a
high level,” president and chief executive Matti Lievonen
said.
The company now sees its reference refining margin at
$3.50/bl this year, down from a previous forecast of $4/bl.
This will likely result in Neste's 2014 comparable operating
profit ending up at the lower end of the guidance range of
€450mn plus or minus 10pc.
Run rates at Porvoo averaged 84pc in the second quarter,
while at the 55,000 b/d Naantali refinery they remained
at about 70pc because of weak margins. Porvoo produced
233,000 b/d in the second quarter, little changed from the
January-March period and compared with 225,000 b/d in
the second quarter of 2013. Naantali's production averaged
44,000 b/d, down from 47,000 b/d in the April-June period
last year.
Diesel Production Line 4 at Neste's Porvoo refinery was
shut down for maintenance because of an unexpected mechanical failure in one of the line's process units.
Page 8 of 13
Argus European Products
Issue 14-150 Tuesday 5 August 2014
deals done
Gasoline (barges)
Seller
Buyer
Loading from
Loading to
BP
Argos
07 Aug
13 Aug
937.00
2,000 included in VWA
BP
Argos
07 Aug
13 Aug
937.00
2,000 included in VWA
BP
Shell
07 Aug
13 Aug
937.00
2,000 included in VWA
BP
Shell
07 Aug
13 Aug
937.00
2,000 included in VWA
BP
Shell
07 Aug
13 Aug
937.00
2,000 included in VWA
Total
Gunvor
07 Aug
13 Aug
931.00
2,000 included in VWA
Total
Shell
07 Aug
13 Aug
938.00
2,000 included in VWA
Shell
Gunvor
08 Aug
12 Aug
931.00
1,000 [10ppm]
Gunvor
Argos
12 Aug
16 Aug
926.00
1,000
Shell
Gunvor
12 Aug
16 Aug
931.00
1,000 [10ppm]
Shell
Gunvor
12 Aug
16 Aug
931.00
1,000 [10ppm]
Shell
Gunvor
12 Aug
16 Aug
931.00
1,000 [10ppm]
Shell
Gunvor
12 Aug
16 Aug
931.00
1,000 [10ppm]
Shell
Morgan Stanley
12 Aug
16 Aug
931.00
1,000 [10ppm]
Shell
Morgan Stanley
12 Aug
16 Aug
931.00
1,000 [10ppm]
Copyright © 2014 Argus Media Ltd
Page 9 of 13
Price $
Volume t Notes
Argus European Products
Issue 14-150 Tuesday 5 August 2014
deals done
Middle distillates
Grade
Seller
Buyer
Delivery
mode
Location
Price $
Gasoil German diesel NWE
Shell
Gunvor
cif
Hamburg
Platts () -0.50
Gasoil German diesel ARA
Gunvor
Morgan Stanley fob
Rotterdam/Antwerp
Ice gasoil (Aug)
+14.00
2,000 included in VWA
Gasoil German diesel ARA
Litasco
Morgan Stanley fob
FARAG
Ice gasoil (Aug)
+13.00
2,000 included in VWA
Gasoil German diesel ARA
Litasco
Morgan Stanley fob
FARAG
Ice gasoil (Aug)
+13.00
2,000 included in VWA
Gasoil German diesel ARA
Litasco
Morgan Stanley fob
FARAG
Ice gasoil (Aug)
+12.50
2,000 included in VWA
Gasoil German heating oil ARA
Vitol
Noble Energy
fob
ARA
Ice gasoil (Aug)
-3.00
2,000 included in VWA
Gasoil German heating oil ARA
Vitol
Noble Energy
fob
ARA
Ice gasoil (Aug)
-3.00
2,000 included in VWA
Gasoil German diesel ARA
Licorne
Morgan Stanley fob
Rotterdam/Antwerp
Ice gasoil (Aug)
+14.00
1,200 included in VWA
Copyright © 2014 Argus Media Ltd
Page 10 of 13
Volume t Notes
18,000
Argus European Products
Issue 14-150 Tuesday 5 August 2014
AVERAGES August TO DATE
Gasoline
$/t
NW Europe
Low
High
Low
High
Mogas 95R 10ppm
943.17
943.67
950.17
950.67
Mogas 91R
933.17
933.67
-
-
-
-
858.33
860.33
953.33
953.83
958.83
959.33
fob
Naphtha 65 Para
Mogas 91R
943.33
943.83
-
-
Naphtha 65 Para
876.00
878.00
867.00
869.00
barge
Mogas 98R
$/t
NW Europe
Low
W Mediterranean
High
Low
High
fob
cif
Mogas 95R 10ppm
Fuel oil
W Mediterranean
Fuel oil 1%S
573.42
577.42
582.08
586.08
Fuel oil 3.5%S
542.33
546.33
541.50
545.50
Fuel oil straight-run 0.5%S
678.75
682.08
-
-
VGO 0.5%
722.17
725.50
722.17
725.50
VGO 1.5%
-
-
696.42
699.75
VGO 1.6%
694.17
697.50
-
-
Fuel oil 1%S
588.67
592.67
594.17
598.17
553.58
557.58
cif
1,016.33
1,016.83
-
-
Fuel oil 3.5%S
557.58
561.58
Eurobob oxy
943.33
943.83
-
-
VGO 0.5%
729.08
732.42
-
-
Eurobob non-oxy
943.33
943.83
-
-
VGO 1.6%
694.17
697.50
-
-
575.50
-
-
Mogas 91R
MTBE
Naphtha 65 Para
943.33
943.83
-
-
barge
1,125.17
1,125.67
-
-
Fuel oil 1%S
572.50
876.00
878.00
-
-
Fuel oil 3.5%S RMG
561.58
Middle distillates
$/t
NW Europe
W Mediterranean
Low
High
Low
High
945.50
946.50
938.25
939.25
Diesel French 10ppm
885.50
886.50
894.33
895.33
Diesel German 10ppm
888.50
889.50
-
-
Heating oil 0.1%
870.33
871.33
874.83
875.83
Heating oil German 0.005%
878.00
879.00
-
-
-
-
865.33
867.33
fob
Jet
Gasoil Russian
cif
Jet
955.67
956.67
959.75
961.75
Diesel UK ULS
899.67
900.67
-
-
Diesel French 10ppm
895.67
896.67
903.00
904.00
Diesel German 10ppm
898.67
899.67
-
-
Heating oil 0.1%
880.50
881.50
883.50
884.50
Heating oil German 0.005%
888.17
889.17
-
-
Gasoil Russian
879.67
881.67
879.67
881.67
Jet
955.00
955.50
-
-
barge
Diesel German 10ppm
891.50
892.00
-
-
Heating oil 0.1%
874.58
875.08
-
-
Heating oil German 0.005%
888.92
889.75
-
-
Copyright © 2014 Argus Media Ltd
565.58
-
-
Fuel oil VWA
563.58
-
-
Fuel oil 3.5%S RMK
551.08
-
-
VGO 0.5%
722.17
725.50
VGO 1.6%
694.17
697.50
Bunkers
$/t
Rotterdam dob
180cst 1%S
Antwerp dob
Low
High
Low
High
610.00
615.00
608.67
613.67
180cst 3.5%S
592.75
597.75
595.67
600.67
380cst 1%S
578.00
583.00
579.25
584.25
380cst 3.5%S
564.42
569.42
566.50
571.50
Argus European Products Methodology
Argus uses a precise and
transparent methodology to
assess prices in all the markets
it covers. The latest version of
the Argus European Products
Methodology can be found at:
www.argusmedia.com/methodology.
For a hard copy, please email
[email protected], but
please note that methodologies
are updated frequently and for
the latest version, you should
visit the internet site.
Page 11 of 13
arGUs eUropean prodUcts
Contents:
Methodology overview
Naphtha and gasoline
Northwest Europe
Cargoes
Barges
West Mediterranean
Middle distillates
Northwest Europe
Cargoes
Barges
West Mediterranean
Fuel oil and VGO
Northwest Europe
Cargoes
Barges
West Mediterranean
Bunkers Rotterdam
Bunkers Antwerp
Forward prices
2
6
6
6
6
7
8
8
8
9
10
11
11
11
12
13
14
14
14
Last Updated: apriL 2014
The most up-to-date Argus European Products methodology is available on www.argusmedia.com
www.argusmedia.com
Argus European Products
Issue 14-150 Tuesday 5 August 2014
Swaps
Gasoline
$/t
Low
High
High-sulphur fuel oil cargo
$/t
±
Low
High
±
Aug
928.25
930.25
-7.00
Aug
556.00
557.00
-5.50
Sep
924.25
926.25
-8.00
Sep
555.00
556.00
-4.50
Oct
901.75
903.75
-7.25
Oct
554.25
555.25
-4.25
4Q14
897.25
899.25
-6.25
4Q14
554.00
555.00
-4.00
1Q15
898.50
900.50
-6.25
1Q15
557.25
558.25
-3.50
Low
High
±
Low
High
Naphtha
$/t
High-sulphur fuel oil barge
$/t
±
Aug
864.00
866.00
-22.00
Aug
560.00
561.00
-5.50
Sep
866.00
868.00
-20.00
Sep
559.00
560.00
-4.50
Oct
868.00
870.00
-17.00
Oct
558.25
559.25
-4.25
4Q14
868.00
870.00
-16.00
4Q14
558.00
559.00
-4.00
1Q15
860.00
862.00
-14.00
1Q15
561.25
562.25
-3.50
Low
High
±
-8.00
Jet cif NWE premium to Ice gasoil
$/t
Low
High
±
Low-sulphur fuel oil
$/t
Aug
+75.50
+76.50
+0.00
Aug
569.25
570.25
Sep
+66.50
+67.50
+0.00
Sep
573.25
574.25
-7.00
Oct
+64.50
+65.50
+0.00
Oct
574.50
575.50
-5.75
4Q14
+63.50
+64.50
+0.00
4Q14
574.00
575.00
-5.50
1Q15
+53.50
+54.50
+0.00
1Q15
576.25
577.25
-4.25
Low
High
±
Gasoil premium to Ice gasoil
$/t
Ice settlements
Contract
$/t
Gasoil
±
Aug
-3.25
-2.75
+0.00
Aug
869.50
-10.50
Sep
-3.00
-2.50
+0.00
Sep
872.50
-10.25
Oct
-2.75
-2.25
+0.00
Oct
876.50
-9.75
4Q14
-2.25
-1.75
+0.00
1Q15
-1.75
-1.25
+0.00
Low
High
Diesel premium to Ice gasoil
$/t
±
Aug
+16.50
+17.50
-0.12
Sep
+15.75
+16.75
+0.00
Oct
+16.00
+17.00
+0.00
4Q14
+15.00
+16.00
+0.00
1Q15
+3.50
+4.50
+0.00
Announcements:
Subscriber note: Only summer gasoline grades will be
reflected until Monday 22 September 2014, and only winter grades will be reflected from Friday 26 September. In
the period 23-25 September, both grades will be reflected
depending on sufficient volume of bids, offers and trades to
constitute a representative market. A minimum of 3,000t of
each spec must be traded for both of them to be considered
in the 23-25 September transition period. If less than 3,000t
of a grade is traded, the trades will not be included in the
day’s volume weighted average.
Copyright © 2014 Argus Media Ltd
Subscriber note: Argus has changed the assessed northwest
Europe jet barge size to 2,000-5,000t effective 14 July, to
reflect prevailing barge discussions in the spot market.
Subscriber note: For trades to be included in Argus gasoline
barge assessments, standard nomination procedures must
be followed. The buyer should give two working days notice
of barge ETA. Nominations received after 1400 London time
or on Fridays after 1300 London time will be deemed to
be received on the following working day. Otherwise, the
original day of nomination will count as day one of the two
days notice.
Clarification: On Argus eurobob oxy barges, only bids and
offers that meet Argus eurobob oxy specifications will be
considered in Argus assessments. Offers stipulating superior
qualities will not be considered and all deals must be concluded on an oxy basis to be included in the Argus eurobob
oxy assessment.
Page 12 of 13
Argus European Products
Issue 14-150 Tuesday 5 August 2014
freight
Spot freight rates
*Freight rates are taken from
Argus Freight
Baltic - UKC
Dirty
Baltic - Med
Dirty
Size t
$/t
30,000
28.80
Cross - UKC
Gasoil
Size t
$/t
22,000
10.06
Size t
$/t
30,000
15.35
Black Sea - Med
Gasoil
Med - UKC
Size t
$/t
Naphtha
30,000
17.40
Jet
30,000
17.13
Cross - Med
Size t
$/t
Gasoil
30,000
10.06
Mogas
30,000
8.46
Naphtha
30,000
8.46
Dirty
30,000
11.74
Size t
$/t
30,000
14.11
Argus European Products is published by Argus Media Ltd.
Registered office
Argus House, 175 St John St, London, EC1V 4LW
Tel: +44 20 7780 4200 Fax: +44 870 868 4338
email: [email protected]
ISSN: 1368-7476
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All intellectual property rights in this publication
and the information published herein are the
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Disclaimer
The data and other information published
herein (the “Data”) are provided on an “as
is” basis. Argus makes no warranties, express
or implied, as to the accuracy, adequacy,
timeliness, or completeness of the Data or
fitness for any particular purpose. Argus shall
not be liable for any loss or damage arising
from any party’s reliance on the Data and
disclaims any and all liability related to or
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extent permissible by law.
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