The 50 ppm gasoil heating fuel market in the Amsterdam-Rotterdam-Antwerp region has strengthened on strong demand at the prompt, lowering the spread to the 10 ppm ultra low sulfur diesel (ULSD) market to the narrowest point since July.
S&P Global Platts assessed 50 ppm FOB ARA gasoil barges at a $1/mt discount to the 10 ppm FOB ARA diesel barge market Friday, narrowing $1.25/mt on day.
The last time spreads between these two spot physical markets were this close was on July 4, when the spread was at a 50 cents/mt discount.
Differentials for 50 ppm gasoil, trading in the ARA barge market, also moved back into positive territory against low sulfur gasoil futures Thursday, to be assessed at a 25 cents/mt premium, up 50 cents/mt on the day.
Furthermore, in the absence of a paper market, a daily 16 cents/mt backwardated structure was defined across the assessment curve for the physical market, further demonstrating the tight market fundamentals. A bid as high as a 50 cents/mt premium at the close of the S&P Global Platts Market On Close assessment process over the front end of the assessment range.
This strength ties in with the rising demand for heating fuel in the north of Europe, particularly from Germany, which is the market's biggest consumer market, but also from the limited gasoil streams in the region, according to market sources.
