Rising middle distillate values weighed on domestic sales in Germany last week, although the price hike was less pronounced in the south of the country because of oversupply.
German middle distillate prices increased for a second consecutive week. Heating oil averaged around €81.10/100 litres last week and diesel just under €125.60/100l, up by almost €2.00/100l and €1.80/100l on the previous week, respectively.
The main driver was a rise in the front-month Ice gasoil futures contract, which reached its highest level since mid-April at $790/t on 19 June, underpinned by supply concerns. But according to traders and importers, Germany itself has no physical supply shortages. The opposite was true in some regions, where oversupply capped price rises last week. This was notably the case in the south and southwest of Germany, where prices went up at a slower pace than the national average.
Rising prices are deterring buyers and weighing on middle distillate sales, traders said. This is reflected in nationwide traded spot volumes of heating oil and diesel reported to Argus, which fell by a respective 46pc and 22pc last week compared with the previous week.
Gasoil imports via northern German ports are declining because of ample domestic production, which has resulted in the cif Hamburg assessment's premium to Ice gasoil futures falling by €2.50/100l since 11 June. Diesel cargo volumes imported to northern Germany in June are at their lowest level since February at 58,500 b/d according to Vortexa data.
