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NW Europe gasoline differentials hit record highs

  • Märkte: Oil products
  • 03.09.26

Tight supply in northwest Europe has sent physical gasoline premiums and backwardation sharply higher this week.

Eurobob gasoline barge differentials against the front-month Eurobob oxy swap reached record highs for both grades at the 2 September close, based on Argus data going back to February 2021. Oxy barges were assessed at a $289/t premium to the swap and non-oxy barges at a $261/t premium.

Physical differentials rose alongside record backwardation between the September and October Eurobob oxy swaps. September closed at a $168/t premium to October on 2 September, compared with a typical seasonal premium of $20-30/t ahead of the switch from summer-grade to winter-grade gasoline.

The record premiums partly reflect a shortage of available gasoline, with inventories in the Amsterdam-Rotterdam-Antwerp (ARA) hub at their lowest in almost five years. Independently-held stocks at ARA fell to 752,000t last week, 32pc below their five-year average and their lowest since 14 October 2021.

Traders attributed the stockdraw partly to rising gasoline demand in several of Europe's largest consuming markets and firm buying interest from the Mediterranean. Several cargoes have loaded for Cyprus, Greece, Turkey and Syria, relatively unusual destinations for northwest European gasoline.

But demand from northwest Europe's traditional long-haul export markets remains weak, partly offsetting this support. Preliminary Kpler data indicate that exports to the US fell to around 118,000 b/d in August from 230,000 b/d in July. Refiners also reported waning blending interest as the summer driving season passed its peak.

Low Rhine water levels have added to supply pressure across northwest Europe, particularly in western Germany and Switzerland, by severely constraining barge movements. They have also restricted deliveries of blending components from the lower Rhine into ARA, making it harder to replenish depleted gasoline inventories.

Rainfall over the past two weeks has allowed inland deliveries from ARA into Germany to pick up. But market participants said blending component flows from the lower Rhine into ARA have yet to recover, while water levels are forecast to fall again in the coming days.

The supply tightness has also pushed northwest European gasoline cracks sharply higher. The benchmark non-oxy gasoline barge crack settled at $57.75/bl against Ice Brent crude futures on 2 September, its highest since June 2022 and the third highest in Argus records.

Fluid catalytic cracker (FCC) margins have risen alongside gasoline cracks, supported by exceptionally strong diesel cracks and falling feedstock costs. The margin for an average northwest European FCC, based on a 70:30 gasoline-to-diesel yield and low-sulphur vacuum gasoil feedstock, reached a record $43.85/bl.

But gasoline cracks remain well below those for diesel, limiting refiners' incentive to increase gasoline output despite the shortage. ARA diesel cargoes settled at a record $99.66/bl premium to benchmark North Sea Dated crude on 1 September, up by almost 19pc from the previous assessment.

High northwest European gasoline prices are also constraining exports. One trader said sellers holding blending-component stocks may still profit from exports to the Mediterranean, but arbitrage opportunities to the US and west Africa appear firmly closed.


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