March 23, 2017 / 3:44 PM / a year ago

Gasoline floats outside Europe as traders bet on profit spike

* Margins under pressure seasonally:

* Profits expected to spike in coming weeks

* Traders look for maximum flexibility

* U.S. gasoline stocks slide:

By Libby George

LONDON, March 23 (Reuters) - Cargoes of floating gasoline are building off the shores of Europe as margins hold near their lowest level seasonally since 2009, traders and market sources told Reuters.

At least five ships with some 300,000 tonnes of gasoline are anchored outside northwest Europe as traders and refiners wait for an expected spike in profits before selling them in coming weeks.

Margins for the motor fuel are expected to move sharply higher in the next few weeks as consumers and traders turn to summer-quality fuel.

“It pays to wait,” one source told Reuters.

Industry monitor Genscape is tracking 390,000 tonnes of gasoline or reformate, which is used to create summer-quality fuel, in vessels including the Amorea, the Hamburg Star, the Hafnia Europe and the Clio circling outside European ports.

Summer is almost always the hottest season for gasoline as consumers in the United States, whose cars guzzle roughly one in every 10 barrels of oil consumed per day, hit the road for holidays.

This year, the gap between profits now and those expected when summer demand starts is even starker as an excess of winter fuel kept prices in check.

Exports to the United States from Europe were limited as the U.S. East Coast import hub was so oversupplied with winter gasoline that it exported cargoes to West Africa. U.S. refiners also cut their gasoline yield in an effort to stem the glut.

U.S. gasoline stocks as a result have shed some 16 million barrels since early February, Energy Information Administration data shows, which could pave the way for imports.

“The forward values are already much higher,” one trader said. “Next week, when summer pricing starts, it will be $5 higher.”

Gasoline stocks in the Amsterdam-Rotterdam-Antwerp hub fell nearly 25 percent to 889,000 tonnes this week, below the peak of 1.33 million tonnes in the first quarter last year, indicating there is room in the continent’s cheaper onshore tanks.

But the owners of the cargoes, which trade sources said included Shell and Gunvor, are aiming for maximum flexibility to ship them quickly to lucrative foreign markets.

“The arbitrage to the United States needs to reopen. Europe needs the outlet,” said Olivier Jakob, managing director of Petromatrix consultancy.

But he cautioned that with U.S. refiners coming back after shutdowns, “the strength of the (margin) recovery is still a bit of a question.”

Additional reporting by Amanda Cooper, Ron Bousso, Ahmad Ghaddar; Editing by Dale Hudson

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