European diesel refining margins rise after Yemen air strikes
(Reuters) - Benchmark northwest European diesel refining margins rose on Friday to above $30 a barrel, their highest since Dec. 7, as intensifying conflict in the Red Sea increased concerns about potential supply disruptions.
Europe relies heavily on diesel imports from Asia and the Middle East.
At least four oil tankers have diverted course from the Red Sea since overnight strikes by the U.S. and Britain on Houthi targets in Yemen, shipping data from LSEG and Kpler showed.
And the Combined Maritime Forces (CMF) has warned all ships to "stay well away" from the Bab al-Mandab strait between the Arabian peninsula and the Horn of Africa, tanker body Intertanko said in a note circulated to its members.
"We anticipate a decline in diesel flows through the Suez Canal into Europe. The market has been put on alert for potential disruptions in this key trade route," Sparta Commodities analyst James Noel-Beswick said.
Regional stocks in the Amsterdam-Rotterdam-Antwerp hub are close to five-year lows, adding further pressure, he added.
The spread between the front-month February ICE Low Sulphur Gasoil contract and the March contract rose by over 40% on the day, according to LSEG data.
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