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Europe Distillates-Diesel margins drop amid tepid demand

Northwest European diesel barge refining margins dropped below $16 a barrel on Friday amid high imports and tepid demand in the region.

Eight barges traded in the afternoon window, with Shell and Mercuria selling to Exxon, Glencore and Vitol. That compared with seven barges traded on Wednesday.

Traders said that diesel demand in northwest Europe has been tepid in recent days.

Gasoil stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub edged 2.7% lower to 2.26 million metric tons during the week to Thursday, data from Dutch consultancy Insights Global showed.

Meanwhile, U.S. distillate stockpiles USOILD=ECI, which include diesel and heating oil, rose by 2.5 million barrels last week to 119.3 million barrels, versus expectations in a Reuters poll for a 0.1 million-barrel drop, Energy Information Administration data showed.

“Diesel shipments into Europe arriving in May are set to reach a 10-month high backed by bumper flows from the Middle East and Asia that was more than enough to wipe out the sharp drop in exports from the U.S.,” said LSEG analyst Raj Rajendran.

Oil product exports from Russia’s Black Sea port of Tuapse in May were down 28.6% from initial plans at 1.093 million metric tons after an unplanned refinery stoppage, traders said and LSEG data showed.
Source: Reuters (Reporting by Ron Bousso; Editing by Shailesh Kuber)

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