The crack for physical FOB ARA diesel barges versus Dated Brent rose to $9.72/b Wednesday, its highest level since December 7 last year when it was $9.84/b, Platts data showed.
While the diesel barge flat price largely tracks crude oil prices, a cut in diesel resupplies to Europe has supported stronger differentials in the European diesel complex lately.
FOB ARA diesel barges were pricing at a $4.50/mt discount to front-month ICE low sulfur gasoil futures Wednesday, up from a $6.75/mt discount March 10, following expiry of the March ICE LSGO futures contract.
Market participants said unworkable arbitrage economics had capped volumes originating from the US Gulf Coast and the East, two major exporters of diesel to Europe.
Firmer market sentiment was also fueled by talk of refinery run cuts and turnarounds, while demand was heard to be steady and trending higher.
"The market [may be] a bit driven by expectations for a big seasonal demand in April," a barge trader said Thursday.
Inventory levels in the Amsterdam-Rotterdam-Antwerp region were hard to peg and sources could not confirm any particular draw this week, but market sentiment was geared towards thinner availability overall.
