Europe’s Jet and Diesel Glut Overshadows Mideast Term Talks

摘要

Mideast term negotiations are taking place against a backdrop of chronic oversupply in Europe’s jet fuel and diesel markets, emboldening buyers to hold out for much lower premiums than they paid this year. Discussions seem to be taking longer than normal as a result, with just one contract concluded so far. Kuwait Petroleum Corp. (KPC) last week agreed to sell calendar 2016 jet fuel to at least one buyer at a $1.60 per barrel premium to the mean of Platts Arab Gulf (MOPAG) assessment, down from the $1.80/bbl KPC agreed for this year. Abu Dhabi National Oil Co. (Adnoc) and Bahrain Petroleum Corp. (Bapco) are still locked in negotiations for next year’s jet fuel and 10 parts per million (ppm) sulfur diesel volume. Traders said Adnoc had opened the bidding for diesel from its new Ruwais West refinery at the gasoil MOPAG plus $2.90/ bbl, well above what potential buyers say they are willing to pay. Bapco is said to have started even higher at more than MOPAG plus $3/bbl despite agreeing MOPAG plus $2.50/bbl for this year. Bapco recently sold a 60,000 ton spot cargo of 10 ppm diesel loading Nov. 17-20 to European major Royal Dutch Shell at MOPAG plus $2.60/bbl.