Europe Gasoline-Cracks at 2 month low, swaps near flat

LONDON, July 2 (Reuters) - European gasoline prices plunged
by about $30 on Thursday as an increase in U.S. inventories was
likely to limit arbitrage opportunities.

Gasoline's crack to crude oil fell to the weakest level in
about two months and the backwardation at the front end of swaps
almost flattened.

PRICES

* Premium unleaded 10ppm gasoline barges traded at six-week
lows of $606-$607 a tonne fob at the close, falling from
Wednesday's close at $633-$644.

The dealing was relatively thin, with about 5,000 tonnes
changing hands.

* The drop in the Eurograde gasoline barge prices
outstripped a sell-off in crude oil, pushing its crack to dated
Brent BFO- to down by about 40 cents to $7.00 a barrel, the
weakest since early May.

* Morgan Stanley sold a 10,000 tonne cargo to Petroplus at
$625 a tonne cif Thames.

* Brent crude futures LCOc1 were trading down $2.08 at
$66.71 a barrel by 1700 GMT. [O/R]

* U.S. RBOB gasoline futures RBc1 were trading down 6
cents at $1.7973 a gallon.

SWAPS

* Gasoline swaps also fell sharply. The balance of July was
$609.50 a tonne and the backwardation between July and August
was 75 cents a tonne, narrowing from $4.25 on Wednesday.
August/September was $3.75, compared with $5.50.

* Cracks also weakened to $5.30 a barrel from $6.25.

INVENTORIES

* The increase in U.S. gasoline inventories were likely to
limit arbitrage export opportunities from Europe and it
outweighed a decline in ARA gasoline stocks. [EIA/S]

* The independent tanks at the ARA area held 710,000 tonnes
of gasoline, compared with 725,000 tonnes last week and 771,000
tonnes a year earlier, Dutch oil analyst Patrik Kulsen said on
Thursday. [ARA/]

REFINERIES

* Refinery restarts in Europe weighed overall oil product
prices.

* Spanish oil and gas firm Repsol (REP.MC: Quote, Profile, Research) temporarily
restarted its 100,000 barrel-per-day Cartagena refinery on
Thursday after a shutdown since April due to poor margins, a
company spokesman said. [ID:nL2912551]

* That followed Total's Vlissingen refinery, which began to
start units after a planned maintenance since late May.

NAPHTHA

* Naphtha was bid at $569 a tonne cif NWE, up from a deal at
$550 on Wednesday.

* Prices took support from the open arbitrage to the United
States.

(Reporting by Ikuko Kao)