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NWE jet fuel barges flip to discount to cargoes as ARA tightness eases

London (Platts)--5Dec2017/952 am EST/1452 GMT


Northwest European jet fuel barges flipped back into a discount to cargoes on Monday, ending nearly two months of barges trading above cargoes.

The spread -- the differential of the FOB Rotterdam Jet barges to the CIF NWE Jet cargoes -- dropped to a discount of $2.25/mt from parity on Friday.

The barges market had commanded a premium to cargoes since October 11, S&P Global Platts data shows.

A combination of increased tightness in the Amsterdam-Rotterdam-Antwerp region due to the refinery maintenance season as well as a steeply backwardated structure in the jet fuel and other distillates markets had largely depleted stocks and ultimately supported prompt loading barge prices.

In a steeply backwardated market, buyers largely favoured smaller clips on barges to the larger size cargoes.

However, the recent return of some key refineries in the ARA region as well as the increased throughput of volumes available on cargoes to be sold onwards as break-bulk in the barges market, have helped alleviate the strength of the market and pressured the barges to the downside.

Work has now been completed at the 180,000 b/d Zeeland refinery while works on parts of the Pernis facility were set to last through November.

However, has been no information about its restart yet. The refinery reported few minor incidents last week, including damage to a storage tank and a minor hydrogen fire at one of the units which was quickly extinguished.

In outright prices, FOB Rotterdam jet barges were assessed at $597.50/mt on Monday from $612.25/mt last Friday while CIF NWE jet cargoes were assessed at $599.75/mt on Monday from $612.25/mt Friday.

In terms of differentials to the ICE low-sulfur gasoil futures, jet barges dropped their premium to $43/mt from $44.75/mt, while the premium of CIF NWE jet cargoes to front-month ICE LSGO rose 50 cents on the day to $45.25/mt.

--Francesco Di Salvo, francesco.disalvo@spglobal.com
--Edited by Jonathan Dart, jonathan.dart@spglobal.com

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