The European gasoline market structure flipped at the close on 17 March, with future prices now at discounts to prompt values.
The Eurobob oxy swap front-month spread switched to this backwardation structure, with the April contract at a $5.25/t discount to March at the close.
The structure began softening in early March as supply concerns arising from the US-Iran war raised prompt values.
The March/April spread is typically at a $25-30/t premium for April, reflecting the higher value of summer-specification materials to those of winter-grade gasoline. Summer-grade gasoline fetches a premium because the amount of cheaper components, such as butane, is reduced in order to reduce evaporability by lowering Reid vapour pressure (RVP).
The start of the Russia-Ukraine war had a similar effect on the Eurobob market structure, wherein the March and April contracts widened to an $11/t backwardation because prompt availability appeared thin.
