Northwest European gasoline margins to North Sea Dated crude hit a 10-month low on 13 October, and remained pressured on 16 October, as demand for European gasoline recedes.
Eurobob oxy gasoline barge premiums to Dated crude were marked at $1.70/bl on 13 October, and rose marginally to $1.73/bl on 16 October, signalling the lowest crack spread since 16 December 2022 when margins hit $1.50/bl.
Demand for gasoline, both domestically and for export, has thinned since the middle of September, and margins have trended sharply downwards since then from $26.36/t on 15 September.
Part of the decline is linked to the seasonal transition from summer to winter grade gasoline, which took place at the end of September. The spread between summer and winter gasoline grades was particularly wide this year at around $10.83/bl compared with $2.45/bl last year, and an average spread of $1.02/bl in 2019-2021 summer to winter transitions.
But the specification-linked narrowing of margins only accounts for part of the recent collapse in gasoline cracks. The other factor appears to be reduced demand for European gasoline. Demand domestically has waned since the middle of September as inland demand up the Rhine river — which had been a supportive factor at the end of the summer — ebbed away.
Export demand to the US has also fallen following the end of the driving season. Exports to the US were at around 370,000 b/d in September according to Vortexa data, compared with an average of 402,000 b/d over the May-August peak driving period. Exports have been at around 147,000 b/d so far in October, according to preliminary data from Vortexa.
Stocks in northwest Europe have risen in the face of refinery outages, highlighting the subdued demand. Independently-held gasoline stocks in the Amsterdam-Rotterdam-Antwerp (ARA) hub increased by 2.7pc to 1.36mn t over the month to mid-October.
Strength in gasoline margins could re-emerge in the near term. Domestically, traders have pointed to refinery maintenance trimming supply further. If low Rhine water levels are accompanied by a rise in German demand with German refinery maintenance ongoing, demand in ARA could rise as buyers look to the hub to source gasoline to refill tanks inland. Export demand could also pull barrels away from Europe with interest in west Africa and the Mideast Gulf picking up.

