OREANDA-NEWS. Narrowing discounts in the US Gulf coast diesel market against Nymex futures yesterday afternoon has led to a string of transatlantic cargo cancellations, shortly after a slump in prices prompted increased bookings late last week and early this week.

At least seven transatlantic diesel cargoes from the Gulf coast were seen cancelled last night and today, according to fixture reports and sources. These include the Aegean Wave, the Seafriend, the Prisco Irina, the Energy Progress, the STI Yorkville, the Sea Horizon and the Energy Pioneer.

The cancellations followed a 3.25?/USG intra-day rise in Gulf coast ultra-low sulphur diesel (ULSD) differentials. The rally narrowed the grade's discount to April Nymex futures from -11.25?/USG to -8?/USG in the course of yesterday's trading session.

The narrower discount to Nymex reduced the incentive to move product out of the Gulf coast, at a time when transatlantic arbitrage was just beginning to look profitable for the first time in months.

Six cargoes remained booked for the transatlantic route out of the Gulf, including the Nord Independence, the Topaz Express, the Flagship Tulip, the Magic Victoria, the Tonna and the Maersk Mikage, fixture reports showed.

In addition, the BW Lynx, originally fixed to carry high-sulphur heating oil out of New York Harbor, was also cancelled. On the west coast, the BW Hawk is no longer booked from Cherry Point, Washington, to Chile.