European gasoil futures advanced to the highest level in 12 weeks high amid a cold snap and as refiners curbed production because of falling margins.
Gasoil for February delivery jumped as much as $8.75, or 0.9 percent, to $973.25 a metric ton on the ICE Futures Europe exchange in London. That was the most since Oct. 30 and is above the five-year seasonal average. The contract was at $970.50 as of 1:15 p.m. local time.
“Temperatures across the European Union have plummeted, helping push gasoil prices higher,” Abhishek Deshpande, an oil markets analyst at Natixis SA said today in an e-mailed response to questions. “On the supply side, refineries in Europe and Russia have reduced their processing rates in response to the deteriorating margins,” with some plants in northwest Europe making losses since mid-December, he said.
France’s Lavera refinery, the Netherlands’ Pernis plant and Exxon Mobil Corp.’s Fawley in the U.K. were among the sites operating at reduced rates, the International Energy Agency said Feb. 18, citing press reports.
Freezing temperatures were recorded in Frankfurt, Amsterdam, Stockholm and Vienna today, according to data from CustomWeather Inc.
Hundreds of European flights were disrupted yesterday after snow and ice swept through the continent. Heathrow airport in London, Europe’s busiest hub, scrapped 196 flights yesterday, or about 15 percent of the total. The temperature may fall to minus 4 degrees Celsius (25 Fahrenheit) tomorrow in London, according to a forecast from the U.K. Met Office.