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Europe Gasoline/Naphtha-Weaker overseas demand weighs
August 21, 2012 / 4:27 PM / 5 years ago

Europe Gasoline/Naphtha-Weaker overseas demand weighs

LONDON, Aug 21 (Reuters) - Gasoline barge prices in
northwest Europe rose on Tuesday, following crude oil futures
higher, but the gasoline refining margin weakened as demand from
key overseas markets fell away. 
    Gasoline traders said the arbitrage to the United States is
closed despite a proliferation of refinery problems that have
pushed average gasoline prices there to $3.72 a gallon. This is
the highest level on record for Aug. 20.
    But backwardation - where prices for prompt delivery are
higher than those for future delivery - is preventing traders
from fully exploiting the opportunity. "Bits and pieces are
moving...It's a difficult window to hit," one said. 
    A U.S.-based broker said there had been an influx of cargoes
in early August but the window was closed now. 
    The West African gasoline market has also quietened down
after a busy fortnight, with a backlog of some 30 cargoes now
waiting offshore Nigeria. 
    "It seems to have dried up again," a broker said. "The swaps
guys are buying but not the PPPRA (Petroleum Products Pricing
Regulatory Agency)."
    Naphtha is still seeing steady demand from petrochemical
companies in Europe who prefer it now that prices of alternative
feedstock propane have risen substantially. Propane is currently
trading at a discount of just $10 a tonne to naphtha.
    But the Asian arbitrage has closed, with the East-West
spread at its lowest level since April due to weaker Asian
petrochemical buying and high Western imports that have yet to
find buyers, traders said..
    "The East has been destroyed," a naphtha broker said. "The
September East-West is now offered at $4.50. It's selling off on
the back of record supply from the West."

    * No Eurobob barges traded in the window. 
    * Some 17,000 tonnes traded ahead of the window at
$1,090-$1,094 a tonne fob ARA. This was up from Monday's
post-window trades at $1,089-$1,091 a tonne. 
    * The early trades came at premiums to the September swap of
$20.50-$25.50 a tonne. The swap was trading at around $1,073.50
a tonne at the market close. 
    * Litasco, Hess, Glencore and Chevron were on the sell side
whilst Trafigura and Vitol were buyers. Gunvor was active on
both sides of the market. 
    * Eurobob's crack to dated Brent BFO- slipped to around
$13.69 a barrel from around $14.46 a barrel on Monday afternoon.
    * Some 16,000 tonnes of premium unleaded gasoline traded at
$1,107-$1,111 a tonne fob ARA, up from $1,105 a tonne in the
previous session. 
    * Statoil, Glencore and Gunvor sold the barges to Vitol.
    * ICE Brent crude futures were up $1.20 at $114.90 a
barrel at 1552 GMT. 
    * September U.S. RBOB gasoline futures were up 1.17
percent at $3.0662 a gallon around the same time.
    * RBOB's crack to U.S. crude futures RB-CL1=R was trading
at $31.64 a barrel, down from $32.01 a barrel around the same
time on Monday.
    * Vitol sold another naphtha cargo to Trafigura at $956 a
tonne cif NWE, for loading on Sept. 6-10. This was up slightly
from Monday's trade at $952 a tonne cif NWE.
    * A trader said it looked like the deal was done at just $3
over the September swap, which seemed cheap. 
    * The prompt naphtha crack was at around minus $7.58 a
barrel, compared with around minus $6.99 a barrel on Monday.

 (Reporting by Claire Milhench; Editing by Anthony Barker)

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