LONDON: Gasoline refining margins in northwest Europe fell to their lowest in nearly a month on Tuesday as arbitrage to the United States narrowed and Nigerian imports appeared under threat.
Strikes at French refineries will continue until Friday, CGT union officials said, scuppering Total's plans to restart operations at the Grandpuits, Gonfreville and Feyzin refineries, all of which have been offline since late May.
The delay should have been supportive to gasoline cracks, as it postponed France's return as a net gasoline exporter, but traders said narrowing arbitrage to the United States put Europe's gasoline under downward pressure.
US gasoline margins saw their largest daily decline in nearly four months on Monday on fears that resurgent fuel imports will flood a saturated market. The crack is at its lowest seasonal level in five years.
While around 800,000 tonnes of gasoline are set to arrive in the US in June from Europe, new bookings are becoming difficult due to falling prices in the States.
Exports heading to Nigeria, the largest West African consumer of transportation fuels, had also gone quiet due to currency problems that prevented independent importers from buying cargoes.
The return of units worldwide from refinery maintenance is also expected to pressure margins, with Morgan Stanley estimating that around 2.7 million barrels per day of refining capacity is set to return from May to June, and an additional 2 million bpd will return in July.
GASOLINE
Gunvor sold to Finco two eurobob gasoline barges during the Platts afternoon trading window at $505 per tonne fob ARA.
About 8,000 tonnes of benchmark eurbob barges traded throughout the day at $509-510 a tonne fob ARA, down from $518-$521 a tonne on Monday.
Litasco, NIC, BP and Glencore sold to Total, Koch, Trafigura and Shell.
Varo sold to Total two premium unleaded gasoline barges, one at $515 and the second at $516 a tonne fob ARA. This compared with a trade Monday at $520 a tonne.
The July swap stood at $514 a tonne at the close, down from $517 a tonne.
Gasoline barge refining margins fell to $10.80 a barrel from $12.90 a barrel and the lowest since nearly a month. * Brent crude oil futures were up 50 cents at $50.05 a barrel at 1546 GMT.
US July RBOB gasoline was down 0.23 percent at $1.5850 a gallon.
The US gasoline crack was trading at $16.50 a barrel, down from $17.50 a barrel on Monday.
NAPHTHA
No cargoes traded. Shell, Glencore Gunvor, Statoil bid for cargoes from $410-$428 per barrel, compared with bids at $426 a tonne on Monday.
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