The volume of middle distillates scheduled to arrive in Europe from the US Gulf Coast in January so far amounts to around 700,000 mt, including 500,000 mt on its way to Northwest Europe and 200,000 mt to the Mediterranean, data from S&P Global Platts trade flow software cFlow showed Wednesday.
Around 1.39 million mt of middle distillates from the USGC arrived in December into Europe, but now the arbitrage looks firmly shut with the HOGO spread firming in the latter half of December.
The HOGO -- the spread between NYMEX diesel and ICE low sulfur gasoil futures -- reached an 11-month high on December 20 of 9.91 cents/gal according to Platts assessments of the contracts at the London close.
The spread had narrowed back to around 7 cents/gal Wednesday afternoon, but remained higher than the majority of assessed values over 2018.
In the US, countrywide commercial stocks of middle distillate were essentially unchanged at 119.9 million barrels, US Energy Information Administration data showed Friday. While inventories were static week on week, their deficit to the five-year average widened to 7.7% from 6.9% during the week prior. Analysts surveyed by Platts Wednesday last week expected a 500,000-barrel draw that would have pushed distillate inventories to more than 11% below the EIA's five-year average.
In the Amsterdam-Rotterdam-Antwerp hub, diesel and gasoil inventories slipped 0.9% on the week to 2.058 million mt in the seven days to December 26, according to data from PJK International released Thursday last week. Diesel and gasoil stocks were 4.9% lower year on year, the data also showed.
