Eurobob gasoline FOB ARA physical barges have fallen to lows not seen since Platts started assessing the market in July 2009, after being offered down amid limited spot demand, a difficult arbitrage to the US Atlantic Coast and Brent crude futures trading near 11-year lows.
The barges were assessed at $389/mt Tuesday, down $7.75/mt day on day to be at a $16.50/mt discount to the front-month swap, from a $12.50/mt discount.
Overall, the Northwest European gasoline complex extended its recent trend Tuesday as the paper market continued to weaken, the arbitrage to the US failed to bring support, and trading activity remained thin.
The January Eurobob gasoline crack swap fell to $11.90/b from $12.65/b Monday while Brent crude futures rebounded slightly from 11-year lows, and the January/February Eurobob gasoline swap contango widened to $8/mt from $7.50/mt.
The gasoline market started December on a balanced note as European gasoline stocks were relatively low in October and November after a big maintenance program, a trader said, adding tanks were now starting to fill up.
The gasoline arbitrage to the US was said to be neither completely closed nor wide open as there was no additional demand pull from the US. "I do not think the arb economics have improved recently," another trader said.
According to a third gasoline trader: "There is plenty of oil in the front...there is oil that needs to find a home, storage is starting to fill up. Gasoline is weak on a [time] spreads basis, but I have never seen cracks that high at this time of year...I guess the the light ends of the barrels are keeping refinery margins positive."
