The Northwest European ultra low sulfur diesel CIF cargo basis Amsterdam-Rotterdam-Antwerp premium to the front-month ICE 0.1% gasoil futures fell $6.75/mt Tuesday as the market saw resupply after tightness because of a heavy refinery maintenance period.
"Its partially arbitrage supplies and partially refineries coming back," a trader said Wednesday, referring to resupply from both outside the region and, further forward, from restarting of refineries from maintenance season.
There is an "armada of LRs coming from the East to North," said one distillate trader. "They've been hitting the north since the second week of October...[and] some are already or about to hit from Singapore and South Korea," he said.
A second trader put arrivals in NWE from India at around 500,000 mt over October.
The attraction of arbitrage cargoes came as the NWE CIF cargo premium reached a 12-month high of $58.75/mt on October 2, Platts data showed.
The NWE market has also been drawing cargoes from the Mediterranean, not a typical move, as the CIF Le Havre ULSD market was assessed at a $27.75/mt premium to the CIF Med diesel market on October 8. This differential, however, has narrowed to $12.25/mt, putting pressure on this movement.
Meanwhile traders said the NWE refineries were expected to start returning from maintenance towards the end of October.
The resupply was also evident in the barge market in the ARA region, as the FOB Rotterdam 10 ppm barge premium to the front-month ICE 0.1% gasoil futures value was assessed at $32.75/mt Tuesday, a day-on-day drop of $6.50/mt, Platts data showed.
