Europe Gasoline/Naphtha-Gasoline dips, Eurobob scarce
LONDON, June 27 (Reuters) - Gasoline barge prices in northwest Europe dipped on Wednesday as trading activity remained subdued against a backdrop of weak demand, but a shortage of benchmark Eurobob gasoline kept a floor under prices.
"There is gasoline around - the problem is that there is a lack of Eurobob," a trader said, adding that refiners had not increased runs as much as expected. "At the same time, blenders aren't focusing on Eurobob, but other grades instead."
Traders said refiners had been making RBOB for the U.S. market. But not much has been moving there outside of the usual system barrels as the arbitrage is not fully open.
The Energy Information Administration (EIA) in the United States said that gasoline inventories had soared 2.08 million barrels week-on-week, far more than a consensus forecast for an 800,000-barrel build, suggesting the U.S. is not exactly short of gasoline.
Nigeria's third quarter tender has yet to transform into solid demand from the West African market with the investigation into subsidy fraud continuing and traders awaiting news of any repayments.
On the naphtha side, the differential between East and West has slipped about $5 a tonne over the last 24 hours to some $15 a tonne as Indian companies have tendered cargoes, reducing the likelihood of European traders sending naphtha East.
Some traders had been looking at moving cargoes from the Mediterreanean to Asia, but there are no fixtures for July loading dates as of yet. "The East is physically balanced, even long, so it doesn't need the barrels," one naphtha trader said.
Traders are hoping that the oversupply of naphtha in Europe may ease once Sonatrach's Skikda refinery shuts for maintenance at the start of July.
"The refinery normally exports around 6-7 cargoes of 30,000 tonnes a month," said one naphtha broker.
A trader said this was already factored into prices and attributed any current tightening in the European market to demand for naphtha from gasoline blenders.
The spread between gasoline and naphtha is still quite wide at some $205.17 a tonne for the balance of June and $174.17 a tonne for July. This makes blending naphtha into gasoline quite profitable.
* Three barges of benchmark Eurobob gasoline traded in the window at $907-$908 a tonne fob ARA, down from Tuesday's trades at $915-$921 a tonne.
* Gunvor sold all three barges, with Cargill buying two and Total one.
* Just 3,000 tonnes traded ahead of the window, with Morgan Stanley selling to Total at $923 a tonne fob ARA, and to Cargill at $925 a tonne fob ARA.
* Gunvor also sold 2,000 tonnes to Total at $918 a tonne fob ARA after the window closed.
* No barges of premium unleaded traded once again.
* By 1539 GMT, Eurobob's crack to dated Brent BFO- was at around $15.98 a barrel, down from around $19.01 a barrel on Tuesday.
* ICE Brent crude futures were up 45 cents at $93.47 a barrel at 1540 GMT as a Norwegian oil workers' strike continued.
* U.S. RBOB gasoline futures in New York were down 1.35 percent at $2.6090 a gallon around the same time.
* RBOB's crack to U.S. crude futures RB-CL1=R was trading at $24.87 a barrel, down from $26.58 a barrel on Tuesday.
* One naphtha cargo traded in the window, with Gunvor buying from Trafigura at $725 a tonne cif NWE. This price was up from Tuesday's trades at $713-$714 a tonne cif NWE.
* The naphtha refining margin was at around minus $12.06 a barrel, a little worse than Tuesday's minus $11.38 a barrel.
* Gunvor won a naphtha tender by Italy's Milazzo refinery for one cargo loading around July 6-8. A trader said the price was at a premium of around $30 a tonne. (Reporting by Claire Milhench and Jessica Donati, editing by William Hardy)
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