The CIF 0.1% gasoil cargo market in the Mediterranean moved into backwardation Monday for first time in seven weeks on progressive tightening of supply options amid sustained end-user demand supported across the North African Countries, sources said.
The last time the market structure was backwardated was February 24.
In March, the contango structure in ICE low sulfur gasoil futures softened while 0.1% sulfur swaps differentials strengthened, reflecting a tightening of the market at the prompt.
By April 5, 0.1% CIF Mediterranean cargo differential swaps switched into backwardation, as the balance-month contract responded to physically short prompt market fundamentals.
Algerian oil company Sonatrach, which issued a tender in March to buy six cargoes of 0.1% gasoil, or 180,000 mt, on Monday issued another tender to buy another four cargoes for May delivery.
Egypt, meanwhile has continued to fill some of its shorts through an agreement with Saudi Aramco to deliver a variety of petroleum products in April, with no news on whether the deal may be extended.
On the supply side, the market is missing material from the Black Sea with several Russian refineries carrying out maintenance this month and with Greece's Motor Oil Hellas (MOH), one of the suppliers of 0.1% sulfur gasoil to Egypt, heard to be planning works at its Corinth refinery beginning May.
