ULSD Northwest Europe cargo-barge spread firms on strong demand, high freight

The price differential between CIF Amsterdam-Rotterdam-Antwerp ultra low sulfur diesel cargoes and FOB barges rose to $11.50/mt, amid higher freight premiums in Europe and good demand, traders said.
This was just $2/mt short of the highest premium seen so far this year, on March 6, and is well above the values seen recently, according to Platts data.
Cargoes typically range between 10,000-60,000 mt deadweight while barges are much smaller vessels, of 1,000-5,000 mt.
UK oil major BP was reportedly one of the major players on the spread, as it has been bidding CIF ARA cargoes consistently in the Platts Market on Close assessment process this week, while selling FOB Rotterdam barges.
Traders said the current wide cargo-barge spread was a clear incentive to combine diesel barges into much bigger vessels and sell them as such.
"Some companies have an interest in keeping that spread wide, I've seen a lot of 30,000 mt vessels arrive in the UK from ARA. They were made from barges," said one trader. "Usually the UK imports a lot of diesel from the Baltic region but not so much recently."
Freight rates on ULSD cargoes sailing in European waters have increased sharply this week and buy tenders from Belgium's Apetra and France's Sagess have kept cargo premiums firm, according to traders.
Barge premiums, meanwhile, have been under pressure, with much lower demand from Germany -- Europe's main oil consumer -- than in April.
Source: Platts