Spot product prices skidded in the week to May 24, but the downside was limited as supplies were seen falling. Middle distillate differentials found support as buyers found it difficult to locate sellers amid tightened markets squee2ed by refinery rate cuts. The throughput cuts in May, aimed at underpinning margins, follow on the heels of April's heavy maintenance, during which refinery production fell 1.2% on the month, according to data from Euroilstock. Jet fuel demand and overall sentiment was weak, but supply tightness put a floor under prices, especially in the Med. "The Mediterranean is very dry [of] jet right now, even traditional refiners that sell are buying," a trader said. "I think the flip from backwardation to contango left people looking to cover shorts with limited fuel in storage." Heating oil buying interest remained as players sought to take advantage of lower prices, but end-user consumption was weak amid warmer temperatures. Some actual demand persisted in Germany, as well. Also lending support were ongoing shipments to Argentina, where a major refinery fire in April has continued to limit supplies in the South American country. Nine tankers have been booked so far in May to deliver gasoil to Argentina.
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