* Three tankers booked for floating storage
* European gasoline refining margins drop
* Stored gasoline highest since July 2016
LONDON, March 15 (Reuters) - Traders are storing gasoline on tankers off Europe’s coast as they struggle to contain a steady rise in supplies since the start of the year that has weighed on prices.
The unusual move reflects a recent weakening in the margin refiners make from converting crude oil into the road fuel as stocks in the Amsterdam-Rotterdam-Antwerp refining and storage hub in recent weeks reached their highest level since July 2016, according to data from PJK International.
At least three 90,000 tonne tankers have been booked in recent weeks to store gasoline for up to 60 days off the Dutch coasts - Maersk Producer, Phoenix Dream and Maersk Promise, according to traders and shipping data.
Gunvor had booked the three cargoes, the sources said.
Traders said the drop in current gasoline prices had tipped the northwest European market into a contango that made it worthwhile to put cargoes of summer-grade gasoline into storage.
Medium-range tanker freight rates have also fallen, making it cheaper to book these ships, ship brokers said.
The stored fuel is believed to be summer-grade gasoline which will be kept until demand revives in the United States, which switches from winter-grade on May 1, traders said.
“Typically, imports of summer grade product rise from mid-March onwards, with the vast majority of product heading into the Atlantic Coast originating from Europe,” Alphatanker said in a note.
Northwest European gasoline refining margins, or cracks, fell to $1.67 a barrel on March 9, the lowest since December 2014, according to Reuters calculations amid a big selloff in winter grade gasoline prices.
The selloff triggered strong demand for buying the motor fuel in the barge market with daily trading volumes hitting a record high of 66,000 tonnes on an Argus basis on Monday.
Additional reporting by Ahmad Ghaddar, editing by David Evans
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