LONDON: Gasoline cracks slipped on Monday as demand from the key US market remained sluggish, though levels held above the eight-month lows hit last week.
While the outlook for gasoline was stronger than that for diesel, which was moving into floating storage as supplies built in the ARA hub, traders said margins are so weak that run cuts are likely on the horizon.
"Everyone is talking about potential run cuts at the moment," one trader said.
US demand typically softens at the end of the peak summer driving season, and traders said that while overall gasoline stocks fell in the United States last week, the build in the key PADD1 East Coast region threw its demand for imports into question.
Despite this, issues at certain refineries, such as the 275,000 bpd Bayway refinery in New Jersey, could draw down local gasoline availability and push buyers to the international market for more cargoes.
Asian buyers were helping to absorb naphtha cargoes, with strong interest for petrochemical use as well as gasoline blendstocks. But the sustainability of the movement was in question.
"Naphtha seems to be (moving) out of the region pretty well," another trader said. "But the question is whether that can happen again for December arrivals."
GASOLINE
One barge of European benchmark eurobob gasoline traded in the afternoon window at $450 a tonne fob ARA, down from $467 a tonne on Friday. Gunvor sold to Total.
Elsewhere during the day, 6,000 tonnes of gasoline traded at $451-$469 a tonne fob ARA, down from $473-$478 a tonne fob the previous week. Total sold to BP and Shell.
The trades ranged from a premium of $3.50 to a discount of $2 versus the November gasoline swap, compared with $6-$10 premiums the day before.
The swap was trading at around $453 a tonne at the close, compared with $467.50 a tonne on Friday.
There were no trades, bids or offers of premium unleaded gasoline.
Brent crude oil futures were down $1.25 a barrel at $49.21 a barrel at 1629 GMT.
The gasoline barge crack in northwest Europe was at $6.78 a barrel, down slightly from $7.02 on Friday.
US RBOB gasoline futures for November were down 3.53 percent at $1.2811 a gallon. The prompt crack fell to $7.56 a barrel, down from $8.81 a barrel on Friday.
NAPHTHA
There were two naphtha trades. BP sold to Statoil at $420 a tonne, and Glencore sold to Koch at $419 a tonne cif NWE.
The crack rose to minus $1.31 per barrel, up from minus $2.25 a barrel.
Comments
Comments are closed for this article.