Markets

Europe Gasoline/Naphtha-Cracks slide on higher crude, thin demand

Published September 26, 2016 Updated September 26, 2016 07:54pm

LONDON: Gasoline refining margins in northwest Europe fell sharply on Monday to just over $9 a barrel as crude gained over 3 percent and demand in the ARA hub waned.

New tanker bookings to the US Atlantic Coast slowed down following the resumption last week of the Colonial Pipeline.

But shipping reports showed bookings of the motor fuel from northwest Europe to west Africa picked up last week. Traders said a recovery in Nigerian crude output meant the OPEC member had extra crude to swap for oil products.

Barge trading activity was thin on Monday, as low Rhine water levels and a seasonal switch from summer grade to winter grade spec stymied demand, barge brokers said.

Ratings agency Moody's said the outlook for refining and marketing industry Europe, the Middle East and Africa and in North America remains negative as demand continues to lag supply.

The amount of gasoline produced in 2015 through mid-2016 on the back of low crude prices has helped outpace demand for gasoline and distillates in every major economy, the agency said.

China's August gasoline stockpiles dropped by 1.55 percent on the month to 8 million tonnes, official data showed on Monday.

Western naphtha arrivals into Asia for October are expected to close below 1 million tonnes for the fourth straight month and significantly lower compared to the 12-month running average of 1.44 million tonnes as of August, according to assessments by Thomson Reuters Supply Chain & Commodities Research.

October arrivals have been assessed to close the month at around 650,000 tonne, 16 percent lower versus September volumes.

GASOLINE

No barges of benchmark eurobob winter grade gasoline traded. Offers for winter grade were seen at $477 a tonne fob ARA, compared with offers at $476 a tonne on Friday.

Some 4,000 tonnes of winter gasoline traded earlier in the day at $465 a tonne fob Amsterdam-Rotterdam, up from $463-$464 a tonne on Friday.

Shell sold to Varo and Rolympus.

There were no trades, bids or offers of premium unleaded gasoline barges.

The October swap stood at $472 a tonne at the close, up from $469.50 a tonne.

Gasoline barge refining margins fell to $9.08 from $10.77 a barrel on Friday.

Brent crude oil futures were up $1.51 a barrel at $47.40 by 1536 GMT.

US October RBOB gasoline futures were up 2.37 percent at 1.4095 a gallon.

The US gasoline crack was trading at $12.53 a barrel, up from $12.31 a barrel.

NAPHTHA

No trades were reported.

Copyright Reuters, 2016