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European jet premiums collapse on Ice gasoil strength

  • : Oil products
  • 25/07/07

European jet fuel premiums to Ice gasoil futures have nearly disappeared after a steady fall since the ceasefire between Israel and Iran at the end of June, although outright values remain elevated.

Argus assessed cif northwest European jet fuel at just a $2.50/t premium to front-month Ice gasoil futures on Friday, 4 July, down from almost $60/t less than two weeks earlier. It is the lowest premium since March 2023.

An analyst said the premium has "fallen off a cliff" since the end of conflict between Iran and Israel erased concerns about supply tightness. A ceasefire was called on 24 June, and has held, and jet fuel premiums have continuously fallen since then.

Jet premiums are being squeezed in part by strength in Ice gasoil futures — the underlying value in Argus' European middle distillate assessments. Ice gasoil prices also cooled along with tensions in the Middle East, but remained relatively high and are rising again. Having been below $650/t for most of the April-early June period, prices peaked at almost $800/t during the conflict and have stayed above $700/t so far in July.

This strength in the underlying futures is keeping outright jet fuel prices above $700/t, after they mostly averaged below that since early April. Jet fuel values typically rise in summer to reflect air travel demand, but with Ice gasoil already high and supply appearing ample to meet peak summer demand, there is little incentive further rises to either premiums or outright values.

Jet premiums to Ice gasoil were between $40-60/t and outright values were above $700/t across the whole of summer 2024.

Diesel overtakes jet

Market participants said significant tightness in the diesel market has caused the rally in Ice gasoil futures.

A unviable arbitrage in May and the first half of June muted imports from the Mideast Gulf and India, and an analyst said all arbitrage opportunities for diesel into Europe currently appear closed.

Product suitable for blending marine gasoil (MGO) — which is in high demand bow the Mediterranean emissions control area (ECA) has come into force — is restricting gasoil available for diesel blending.

This is leading to considerable backwardation in Ice gasoil contracts. The July contract was $44/t above the August contract on 4 July, a 32-month high.

Diesel's premium to Ice gasoil futures has surpassed that of jet fuel for the first time since March 2023. Outright cif northwest European diesel prices were more than $7/bl above jet on 4 July, even though jet usually commands a premium at this time of year. This was diesel's widest premium to jet since the same period.

Market participants expect jet fuel premiums to rebound but said backwardation must first narrow, which should happen as diesel market tightness eases. Higher diesel imports could come in August, as shipping fixtures indicate the very large crude carrier (VLCC) Nissos Keros may load diesel for northwest Europe in the next few weeks.

By Amaar Khan

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25/12/08

German heating oil demand still high on lower prices

German heating oil demand still high on lower prices

Hamburg, 8 December (Argus) — German heating oil demand remained strong nationwide in the week ending 7 November. Traders in the country have differing views on how the increase in CO2 tax and greenhouse gas reduction quota (GHG) from January will affect consumer purchasing behaviour at the end of the year. Traded heating oil spot volumes reported to Argus fell slightly in most regions from the previous week, but remained high compared with a weak October. Wholesale heating oil prices fell to their lowest since late October in line with Ice gasoil futures, which supported demand. Traders have differing views on how heating oil demand will develop in December. Some companies had expected higher demand because of low prices. Other market participants said there has been a steady increase in buying interest compared with previous weeks. It is unclear if this is related to the 1 January increase in the CO2 tax and GHG quota. The topic has not received enough media attention to make consumers aware of the pending price hike. Still, many expect a rise in demand before the year comes to a close. High utilisation of the inland barge fleet in the week ending 7 December, following a long period of low demand for shipping capacity, points to traders on the Rhine stocking up in preparation. How much prices in Germany will actually rise at the turn of the year is still unclear because the CO2 tax is moving from the current fixed-price model of €55/t CO2e to an auction system, where the price of an emission allowance can fluctuate between €55/t CO2e and €65/t CO2e. Some market participants are still holding back on offers for 2026. Others are offering a surcharge for heating oil of around €4/100l, traders said. One seller is already offering diesel for truck loading in January with a premium of about €14/100l to the current market price in that region. By Johannes Guhlke Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Funds’ Ice gasoil long position down from 45-month high

25/12/04
25/12/04

Funds’ Ice gasoil long position down from 45-month high

London, 4 December (Argus) — Sharp swings in European diesel prices in November were driven in part by entities with no physical exposure, as money managers briefly held their largest long positions in Ice gasoil futures in nearly four years. Funds have looked to gasoil futures because of increasing volatility in the contract when compared with Ice Brent crude futures, according to a senior participant in oil paper markets. The daily change in the value of front-month Ice gasoil has averaged 1.66pc so far this year, compared with 1.32pc for front-month Ice Brent. Money managers — hedge funds and pensions funds, along with other entities managing on behalf of clients — have increased their long positions in Ice gasoil futures as the year has progressed. This reached a 45-month high of 153,689 lots in the week to 18 November, according to Ice's Commitment of Traders report. Ice gasoil futures hit $777.50/t on 18 November, the third-highest of the year. Money managers trimmed 10pc of that position the following week, to 137,971 as of 25 November. Ice futures fell below $700/t on that date, pressured by reported progress on a plan to end the conflict in Ukraine. This led market participants to consider what peace would mean for diesel markets: a slow down in Ukraine's drone campaign against Russian energy infrastructure and, in the longer term, a possible European return to importing Russian diesel. Funds' long position is still almost double the 74,015 held at the start of 2025, and the average 75,398 held in 2024. Long and the short of it Before peace talks started to progress, money managers' net long positions were the highest in more than three-and-a-half years. An analyst said funds have probably taken an overall position of being long diesel cracks — taking long positions in gasoil futures and short ones in Brent. Permanent cuts to refining capacity in Europe, as well as extensive temporary outages this year, have contributed to a disconnect between gasoil and Brent price movements. As gasoil prices rise, refiners can hit capacity limits, which has capped their crude buying and kept Brent steadier. Managed money held the biggest short position in Brent since at least 2015 on 21 October at 190,639 lots. This has fallen since, but did rebound to 163,975 on 25 November, the eighth shortest since 2015. Funds' involvement in futures has further increased volatility, as they tend to buy and sell futures more quickly than entities with physical exposure. That volatility increases potential losses as well as potential gains. Some funds may have made very large losses this year because of unexpected swings, the paper market participant said. European diesel often prices on a exchange-of-futures-for-physical (EFP) basis, using Ice gasoil futures, meaning the futures price can be an influence on the physical price. European physical diesel cargoes priced at a $45.64/bl premium against North Sea Dated on 19 November, the highest in nearly three years. The following week, when money managers were cutting their long positions, the physical diesel premium fell to $27.15/bl. Ice gasoil futures is a physically-delivered contract, so any price dislocation is generally soon closed as traders look to work an arbitrage between the futures and physical. By Josh Michalowski and Benedict George Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Qatar presents 2040 climate target to UN

25/12/04
25/12/04

Qatar presents 2040 climate target to UN

Edinburgh, 4 December (Argus) — Qatar has pledged to reduce its emissions by 42mn t of CO2 equivalent (CO2e) by 2040 from a 2019 baseline, with the oil and gas sector "at the forefront of national mitigation efforts". Qatar does not provide its total greenhouse emissions for 2019, but said its climate plan encompasses CO2, methane and nitrous oxide gases. It covers the energy sector — oil and gas, power and water — construction and industry, transport, waste and agriculture, forestry and other land use. Parties to the Paris Agreement were required to submit climate plans, known as nationally determined contributions (NDCs), for 2035 to the UN climate body UNFCCC this year. Qatar had previously targeted emission reductions of 25pc, or 37mn CO2e, by 2030, compared with a business-as-usual (BAU) scenario. BAU scenarios typically assume emissions based on current policies, leaving room for potential increases. The country's emission cuts in its oil and gas sector will rely on "deploying cleaner fossil fuel technologies, developing engineered sinks to store emissions, diversifying the energy mix, and driving operational excellence across existing facilities and infrastructure", according to its climate plan. Qatar is the world's largest LNG producer, with a production capacity of 77mn t/yr, according to QatarEnergy, and its economy is heavily reliant on hydrocarbon revenues. The country's climate plan highlights the country's vulnerability to response measures to mitigate climate change, resulting from its economy's reliance on hydrocarbons. "Qatar is actively working to reduce the socio-economic effects of global climate action," the plan said, adding that it seeks to balance climate goals with national sustainable development. "Despite many efforts and considering its role as a leading producer and exporter of natural gas, Qatar remains significantly vulnerable to climate response measures," it said. Qatar is part of the Arab Group, a negotiating group in UNFCCC climate talks, which is seeking to focus on cutting emissions from fossil fuels, rather than hydrocarbon production and consumption, through increased adoption of carbon capture technologies. The country said it plays "a pivotal role" in supporting other countries' targets by "reliably supplying them with a cleaner alternative to coal and oil and providing a critical backup for intermittent renewables". Qatar's climate plan sees the secure and affordable supply of lower-carbon energy as well as the deployment of carbon capture and storage (CCS) and the management of emissions of energy production as the focus to pursue sustainable development and climate action. The country considers itself to be among the leaders in CCS with its Ras Laffan project, and aims to capture 11mn t/yr of CO2 by 2035. Engineering firm Samsung C&T was recently awarded a contract to build a 4.1mn t/yr CO2 facility to process and store emissions from Qatar's LNG liquefaction plants. Qatar, in its climate plan, highlighted the country's water supply vulnerability to temperature increases and heat. The power and water sector accounts for a large share of the country's emissions. Water scarcity is also responsible for increasing greenhouse gas emissions (GHG) in Bahrain through desalination, although its energy sector remains the main source of emissions, according to the country's new climate plan. The country is heavily reliant on fossil fuels for its energy and revenues, while "limited land availability and competing land-use demands constrain large-scale deployment" for the development of solar energy. Rising demand over the peak summer months this year meant that Bahrain had to import LNG for the first time since commissioning its 800mn ft³/d onshore LNG receiving and regasification terminal in 2020. But it is looking at renewables options and is in talks with Saudi Arabia for a link to a large-scale solar facility. Bahrain said that response measures to climate change "may lead to economic losses that, in turn, hinder Bahrain's ability to pursue effective climate action and achieve broader sustainable development objectives." By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Idemitsu, Kanematsu start biofuel supply for ships

25/12/03
25/12/03

Idemitsu, Kanematsu start biofuel supply for ships

Osaka, 3 December (Argus) — Japanese refiner Idemitsu and trading house Kanematsu have started supplying biofuel mixed with fatty acid methyl ester (Fame) for oceangoing ships, to help reduce greenhouse gas (GHG) emissions in the maritime sector, the companies said today. In October, Idemitsu began bunkering cleaner fuel oil, which includes up to 24pc of Fame, for oceangoing ships, using Kanematsu' storage and shipping facilities in southern Japan's Kokura, a spokesperson at Idemitsu told Argus on 3 December. Under this partnership, Kanematsu procures Fame and blends it with fuel oil supplied by Idemitsu. The Fame mixture will cut GHG emissions by around 20pccompared with conventional fuel, Kanematsu said. Idemitsu aims to deliver a total of 5,000t of bio-blended fuel by March 2026, including supply for domestic vessels. This is equivalent to the amount of fuel consumed by a 300,000 dwt vessel during about 50 days of operation, the company added. The start of their commercial operations comes after Idemitsu's demonstration in northern Hokkaido , where it tested bunkering operations for coastal vessels with fuel containing 24pc Fame in 2023-24. Idemitsu is also gearing up to develop a supply chain for low-carbon methanol for vessels, aiming to start methanol bunkering from the April 2026-March 2027 fiscal year. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

India's transport fuel demand rises in November

25/12/03
25/12/03

India's transport fuel demand rises in November

Mumbai, 3 December (Argus) — India's transport fuel demand rose to 3.37mn b/d in November, up by 10pc on the month and 4pc on the year on the back of rising domestic demand, preliminary oil ministry data show. Diesel demand rose by 16pc on the month and 5pc on the year to 2.12mn b/d in November. But gasoline demand fell marginally on the month after festive demand in October. Demand for jet fuel rose by 5pc on the month as air travel activity remained strong. India's diesel demand continues to rise because of rising construction activity during winter. Diesel demand weakens around monsoons as heavy rains impede movement of commercial trucks and vehicles — major consumers of the fuel. Irrigation activities also slowed because of the rain as some parts of north India experienced heavy floods. India's transport fuel demand totalled 3.07mn b/d over January-November, up by 4pc on the year. Gasoline demand posted the largest increase of 6pc compared with a year earlier, followed by diesel and jet fuel each rising by 3pc. India exported 1.29mn b/d of oil products in November, up by 12pc on the year, according to market intelligence firm Kpler. Crude imports also rose by 15pc on the year to 5.07mn b/d in November. By Rituparna Ghosh India's Jan-Nov oil products demand b/d Product Jan-Nov '25 Jan-Nov '24 y-o-y ± % Gasoline 971,779.5 914,243.8 6 Diesel 1,903,147.5 1,855,337.5 3 Jet fuel 195,927.3 190,217.3 3 Total 3,070,854.3 2,959,798.6 4 Source: Oil ministry India's oil product demand b/d Products Nov '25 Oct '25 m-o-m ± % Nov '24 y-o-y ± % Gasoline 986,678 995,465 -0.9 965,553.3 2.2 Diesel 2,125,851 1,830,828 16.1 2,030,612 4.7 Jet fuel 205,668 195,475 5.2 196,474.7 4.7 Total 3,371,327 3,057,694 10.3 3,241,832 4 Source: Oil ministry Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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