European spot prices fall amid rising inventories.

摘要

Spot product prices dropped in the week to June 1, down for the second straight week, due to bearish rises in inventories in the US and Europe. Middle distillate prices were pressured down by rising stocks and lackluster buying interest. "A strong backwardation on distillates kept buying interest very limited," stated Riverlake Barging. "As a result, barge demand is slow." On Wednesday, the US EIA's inventory report showed mat middle distillate inventories edged up 0.6MM bbl to 114.6MM bbl, marking the first build in eight weeks. An increase in middle distillate inventories in the US could result in additional diesel arbitrage shipments sent to Europe from the US Gulf Coast. Additionally, gasoil stocks held in Europe's ARA storage hub rebounded on the week. Diesel flows into Europe were seen growing in June, likely due to the completion of seasonal refinery turnarounds in several regions. Imports from the US Gulf Coast for June are pegged at around 1.0MM mt (7.5MM bbl), up from 850K mt (6.4MM bbl) in May, and ULSD exports from the Russia Baltic Sea port of Primorsk are seen jumping to 1.208MM mt (9.1MM bbl) in June, from 1.126MM mt (8.5MM bbl) in May. Market volatility this month saw a vessel carrying diesel change its destination twice during its trip. A new-build VLCC, which set out from Asia, was initially heading to Rotterdam before changing its destination to the New York Harbor and then again to Gibraltar. "The price action now makes Europe much more attractive than the US, so it does make sense," a trader said.