Ultra low sulfur diesel cracks are at a 6-week high on strong buying interest for cargoes in the region and a rise in the front-month 0.1% ICE gasoil futures contract.
The crack for physical FOB Rotterdam ULSD barges rose to a $17.04/mt premium to Dated Brent on Monday, its highest since January 6 according to Platts data.
ULSD cash premiums have risen over the last few weeks with the FOB ULSD Rotterdam barge premium to the March 0.1% ICE gasoil futures contract closing at $15.50/mt last Thursday, the highest so far this year.
Several traders said the month of February typically sees a rise in consumption from January.
Shell sold a 20,000 mt ULSD cargo on Tuesday afternoon to Glencore for delivery into Thames for March 1-5 at $19.25/mt above the March 0.1% ICE gasoil futures contract.
The premium last closed at $18/mt, down 75 cents/mt on the day but still substantially higher than the $9/mt to $11/mt level seen in January.
The front-month 0.1% ICE gasoil futures contract has also risen recently, closing at its highest level of the year on Tuesday at $933.25/mt 16:30 London time.