LONDON, Dec 11 (Reuters) - Diesel barge differentials in northwest Europe declined on Wednesday with little demand throughout the day.
Traders hoped that colder temperatures in the region in recent days would spark new buying interest, but demand for heating oil in key markets remained muted.
The International Energy Agency (IEA) warned that OECD countries this winter could face a shortage in heating oil supplies as middle distillates stocks are considerably lower than in recent years.
"In the event of prolonged cold weather and an associated surge in heating fuel demand, these inventories could be depleted rapidly," the IEA said.
In Europe, though inventories appear tight, high consumer stocks in Germany, the region's largest heating market, will provide a buffer for any large draws in the event of prolonged cold weather, the IEA said.
Distillates stocks in the United States rose sharply over the past week to more than 118 million barrels as refinery utilisation rates continued to rise, data from the Energy Information Administration showed. [EIA/S}
Heating oil stocks nevertheless declined as demand rose with the recent cold snap that hit the East Coast.
Benchmark U.S. heating oil futures
The arbitrage from the U.S. Gulf Coast to Europe remained shut as the spread between the U.S. heating oil and European gasoil futures, known as HOGO, remained too wide, traders said.
"We need a much weaker HOGO for the arbitrage to kick in. Currently it is still too strong because distillate stocks in the U.S. are low," a trader said.
Turkey's sole refiner, Tupras, this week issued a tender to buy a cargo of gasoil with 0.1 and 0.2 percent sulphur content and/or a diesel cargo for Dec. 26-28 delivery.
Tupras also issued a tender to sell a cargo of jet fuel, a trader said.
GASOIL
* Two barges of 0.1 percent gasoil traded at minus $1 to flat against the December ICE gasoil futures. Vitol sold to BP and Glencore.
* No gasoil cargoes trades in northwest Europe. Phillips 66 offered two cargoes into Le Havre. Gunvor bid for a cargo cif basis Le Havre.
* In the Mediterranean, there were no offers, while Glencore bid for two cargoes cif basis Genoa.
* One barge of 50 ppm gasoil traded at $5 a tonne above the January gasoil futures, compared with $7 a tonne above the December contract on Tuesday. Glencore sold to Cargill.
* By 1715 GMT December ICE gasoil futures
* The ICE gasoil crack
* The contango of the December and January ICE gasoil futures
DIESEL
* Five diesel barges traded at $11 to $15 a tonne fob ARA above January gasoil futures, compared with $13 to $16 a tonne on Tuesday.
* Vitol, Licrone, Shell and Vitol sold to Gunvor, Total, TPR and AST.
* One cargo traded in northwest Europe. Gunvor sold to BP a cargo for loading Dec. 21 into Teesside. Trafigura also bid for a cargo into Teesside.
* No cargoes traded in the Mediterranean. BP offerd one cargo cif basis Mersin. Total bid for one cargo cif basis Koper.
JET FUEL
* One barge traded at $70 a tonne fob ARA above the January gasoil futures, compared with $70 to $72 a tonne on Tuesday. Vitol sold to Shell.
* No cargoes traded. BP bid for two cargoes, Vitol offered two.
FUEL OIL
* Barges of low-sulphur fuel oil (LSFO) with 1 percent sulphur content were discussed at $604 to $610 a tonne fob ARA.
* Barges of high-sulphur fuel oil (HSFO) with 3.5 percent sulphur content traded at $576.75 to $578 a tonne fob ARA, up from $574.50 to $576 a tonne.
(Reporting by Ron Bousso; Editing by David Goodman)
((Ron Bousso)(email: ron.bousso@thomsonreuters.com)(Tel.: +44 0 207 542 2161)(Reuters Messaging: ron.bousso.reuters.com@reuters.net))
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Keywords: MARKETS EUROPE/DISTILLATES
