Prompt European diesel futures settled at their highest premium to Brent crude in around two months at $20.63 a barrel on Wednesday, LSEG data showed, as lower local production and imports have coincided with firming demand.

The spread between July low-sulphur gasoil and August Brent crude, known as the crack spread, rose by 8% on Wednesday to hit its highest since April 17.

European diesel refining margins have drawn support from lower imports from the U.S. and India, and reduced local supply as a result of refinery outages, according to Sparta Commodities analyst James Noel-Beswick.

Diesel demand has firmed in inland European markets, two trading sources said, while in the Mediterranean the start of the summer peak tourism season is helping to clear oversupply, another added.

July low-sulphur gasoil futures also flipped to a $6 per ton premium to October gasoil on Wednesday, from a $1 discount last Friday, in another sign of a tightening European market.
Source: Reuters (Reporting by Robert Harvey; Editing by Susan Fenton)