Europe Gasoline/Naphtha-Steady, overseas demand awaited

Fri Jul 26, 2013 12:20pm EDT

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LONDON, July 26 (Reuters) - Gasoline barge prices in
northwest Europe held steady on Friday in a lacklustre market,
with traders looking for a pick-up in demand from overseas given
the weak state of the domestic market.
    European oil demand fell further in the first half of 2013
despite glimmers of economic recovery, as modest German growth
could not offset steep consumption declines in France, Italy and
Spain, according to data compiled by Reuters. 
    A sharp decline in the cost of U.S. ethanol credits known as
RINs on Thursday to below $1 raised hopes
amongst some traders that more gasoline cargoes would now make
their way across the Atlantic from Europe.
    This followed unexpected week-on-week declines in U.S.
gasoline stocks on Wednesday, with a 1.4 million barrel
drop in the key East Coast market. 
    But RINs prices remain very elevated, which means the gap
between U.S. and European gasoline prices needs to be much wider
than in the past to make the arbitrage workable. Some traders
said that when duty and freight costs were included there was
very little scope for gasoline shipments.
    Harry Tchilinguirian, head of commodity market strategy at
BNP Paribas, noted that lower RINs prices might simply lead to
more U.S. gasoline and blending components staying in the
domestic market, adding to inventories and reducing demand for
European gasoline. 
    European gasoline components traders said it was also very
quiet on the MTBE side. "There has been a little demand,
basically for EBOB blending but not the big blends for Mexico or
even West Africa," one said. 
    Another market participant confirmed that the West African
market was still quiet, despite the issuance of quarterly
gasoline allocations by Nigeria.
    In refinery news, trade sources said that Exxon Mobil's
 246,000 barrels-per-day Antwerp refinery will shut for
maintenance from September 20 to early November. 
    Repsol's Bilbao refinery is also planning a partial
maintenance in October-November. 

    GASOLINE 
    * No Eurobob gasoline barges traded in the Platts price
assessment window. 
    * Some 4,000 tonnes traded ahead of the window at $998 a
tonne fob ARA, at the upper end of Thursday's pre-window range
of $987-$1,000 a tonne. Gunvor and BP sold the barges to Cargill
and Statoil.
    * These trades came at premiums to the August swap of $2.50
a tonne.   
    * Two barges of premium unleaded gasoline traded at $1,011 a
tonne fob ARA, in line with Thursday's trades. Total bought the
barges from Vitol and Trafigura.
    * The August swap was trading at about $998 a tonne fob ARA
at the market close. 
    * By 1555 GMT, Eurobob's crack to dated Brent was up
at around $11.13 a barrel, from around $10.05 a barrel on
Thursday.
    * ICE Brent crude futures were down 74 cents at
$106.92 a barrel. 
    * U.S. RBOB gasoline futures in New York were up 0.44
percent at $3.0303 a gallon. The prompt crack was up
at $21.22 a barrel.

    NAPHTHA 
    * Three naphtha cargoes traded in the window, two at $875 a
tonne cif NWE and the other at $876 a tonne. This was up
slightly from Thursday's trade at $874 a tonne cif NWE. 
    * Shell bought a cargo from BP, Gunvor bought one from BASF
and Vitol bought one from Glencore. 
    * The naphtha crack was a little firmer at around minus
$8.61 a barrel, from around minus $9.14 a barrel on Thursday.
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