Falling Russia Diesel Exports Help Lift Europe Refinery Margins
Refining margins in northwest Europe touched $7/bbl in the past 10 days, on the back of lower Brent prices and falling gasoil and diesel exports from the U.S. and Russia, the biggest suppliers of middle distillate to the region, according to JBC Energy.
Ultra-low-sulfur diesel shipments from Primorsk, the biggest export port in Russia, are forecast to decline by 45,000 b/d this month, compared to September, to 195,000 b/d, the Vienna-based energy consultancy said.
About 25 tankers are seen loading about 673,000 metric tons (just over 5 million barrels) from Primorsk for the first 23 days of October, according to the OPIS Tanker Tracker on FleetMon.com. That's equivalent to about 218,000 b/d to date, with another week's loadings to be added to the tally, with vessels yet to be chartered.
"This would be the first time this year volumes are below 200,000 b/d and is primarily a result of maintenance at several key refineries that feed into Primorsk this month," according to JBC Energy.
The margin for a complex refinery in the Amsterdam-Rotterdam-Antwerp region to produce clean products for the Rotterdam barge market hit $7.63 on Oct. 1, the highest this year. It's since fallen to $5.63/bbl on Oct. 8 as front-month gas oil futures in northwest Europe plunge, with today's price settling at $766.25 per metric ton, down 18.7% since the start of 2014.
The consultancy measures the crack against dated Brent, assessing the difference between crude costs and the refined products sales price but doesn't include operating costs, of which energy comprises about 55%.
Refinery turnarounds in Europe peaked last month, with more than 1 million b/d offline, according to London-based consultancy Energy Aspects.
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