Spot product prices slid across the barrel in the week to Dec. 5, without a bottom in sight, as the futures market continued to weaken on poor fundamentals, casting a bearish shadow over the prompt market. ULSD and heating oil differentials were pressured down by waning end-user demand, which traders blamed on warmer temperatures hitting the region. Also, market players noted that many buyers had already stocked up in recent weeks, taking advantage of low prices. "Demand is slow. People filled up their tanks when gasoil was at $700/mt," a trader noted. On the supply side, bearish sentiment was injected into the diesel market on expectations of rising imports in the weeks ahead, as traders said a flurry of shipments were due to arrive from Russia, the US, the Middle East, and India. The arbitrage window from the US Gulf Coast has been closed, but players expected an opening soon, as refineries in the US are running at record-high rates for this time of year, leading to a surprise build in weekly middle distillate stocks. Jet fuel sentiment strengthened as inventories in ARA storage slid to their lowest level in more than two months. However, the upside was limited amid lackluster demand and a two-day pilot strike that forced German airline Lufthansa to halt about half of its flights. On the other hand, demand is seen rising in the weeks ahead during the year-end holidays.
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