USGC middle distillates flows to Europe in Aug already 740,000 mt: cFlow

US Gulf Coast middle distillate shipments due to arrive into Europe in August are scheduled to amount to at least 740,000 mt, of which around 460,000 mt is heading for Northwest Europe and 280,000 mt to the Mediterranean, data from S&P Global Platts trade flow software cFlow showed Aug. 11.

Now In July, around 400,000 mt of USGC middle distillates made their way to Europe, two thirds of which went to Northwest Europe and the rest to the Mediterranean.
Six clean tankers left the US Gulf Coast over the past eight days (since Aug. 3) to head to Europe. All are medium-range tankers. Among them are sailing towards Morocco: the Sunny Horizon to Mohammedia and the Turquoise to Jorf Lasfar, cFlow data showed.

While some middle distillates traders said last week that the diesel arbitrage from the US into Europe was open, this week there is doubt about whether it is workable.

“I’m seeing [the arb] hovering right around breakeven on paper,” a trader said Aug. 11. “So I think folks for sure are still sending barrels…but hearing production ramping up more lately on the other side of the Atlantic, so probably the arb cargoes are not as needed anymore.”

There was also talk about more fixing of ships with Latin American options, just in case, he added. “So the arb is not as clean and clear as it was a month ago, I’d say.”

On the US Gulf Coast, diesel rose on Aug. 10 after falling heavily during the previous week.

Platts assessed ULSD on the Gulf Coast at the NYMEX September ULSD futures contract minus 5.55 cents/gal on Aug. 10, up 35 points/gal on the day. The market was last higher on Aug. 3, when it was assessed at September futures minus 5.30 cents/gal.

During the previous week, Gulf Coast diesel fell to a multi-month low, with Platts assessing the market at September futures minus 6 cents/gal on Aug. 6. ULSD on the Gulf Coast was last seen lower on June 10, when the market was assessed at prompt-month futures minus 6.10 cents/gal.

The drop came as regional stocks built to a record high, rising 1.19 million barrels to 54.69 million barrels during the week ended July 31, US Energy Information Administration data released Aug. 5 showed. ULSD stocks on the Gulf Coast have not been higher since the EIA began recording the data during the week ended April 9, 2004.

USGC FLOWS TO EUROPE (‘000 MT)

Source:Platts