USGC middle distillate flows to Europe jump to 410,000 mt so far in June

london — US Gulf Coast middle distillate shipments due to arrive in Europe in June are expected to be at least 410,000 mt, with around 210,000 mt bound for Northwest Europe and 200,000 mt for the Mediterranean, data from S&P Global Platts trade flow software cFlow showed June 5.

In May, only around 230,000 mt of middle distillates went from the USGC to Europe, which represented the lowest volume of middle distillates coming from the USGC since at least January 2018, when such records by Platts began.

According to market participants, the diesel arbitrage from the USGC to Europe has recently re-opened with diesel consumption recovering in Europe thanks to the lifting of lockdowns while demand from Latin America has faltered as the pandemic there was hindering business activity. As a result, many medium-range tankers were now pointing to the Mediterranean.

"There is more product coming from the US, on bigger ships, on MRs...but if you look for a handy you will struggle to find one in June," a market participant said. "There has been a massive increase in demand [since the lifting of lockdown] and Italy is importing more than usual because of run cuts...with lockdowns demand was bound to plunge but refineries were slow to react and [since then] some of the demand has picked up but refineries are again slow to catch up," the source added.

Across the Atlantic, US commercial stocks of ULSD -- with a maximum 15 ppm of sulfur – jumped 9.3 million barrels to 160.8 million barrels for the week ended May 29, according to data on June 3 from the US Energy Information Administration. This represents the highest US stocks have been for the fuel since the EIA began recording the data during the week that ended April 9, 2004. On the US Gulf Coast, ULSD inventories increased by 2 million barrels on the week to 48.4 million barrels.

USGC FLOWS TO EUROPE (in 000'MT)