Europe Products-rise on drop in U.S. gasoline inventories

LONDON, July 15 (Reuters) - European oil product prices
jumped on Wednesday, led by gasoline following a surprise drop
in U.S. stocks of the motor fuel. Gas oil rose towards $500 a
tonne.

GASOLINE AND NAPHTHA <EURO/DIFF/MOGAS>

Benchmark 10 ppm premium unleaded gasoline PU-10PP-ARA
rose on Wednesday, supported by a surprise drop in U.S. gasoline
stocks in the American Petroleum Institute's (API) weekly
report.

Gasoline inventories dipped 69,000 barrels in the key
European export market, against analysts expectations for a 1
million barrel build. [ID:nN14605500]

However brokers cautioned potential profits remain low for
European traders looking to ship cargoes west.

* Premium unleaded gasoline barges traded between $578 and
$581 a tonne fob ARA, up from Tuesday's close around $575
a tonne.

* Trade was relatively brisk with 13,000 tonnes changing
hands. Gunvor sold 8,000 tonnes. Trafigura and Shell were the
main buyers.

* European gasoline's crack to dated Brent BFO- held firm
at $8.00 a barrel. Brent futures LCOc1 were up by $1.20 a
barrel to $62.06 by 1157 GMT.

* U.S. RBOB gasoline futures rose by more almost 2 percent to
$1.6750 a gallon.

* Gasoline swaps were at $570.00 a tonne for August, sitting
at a $3 discount to July. September was trading at $564 a
tonne.

* Brokers said that arbitrage opportunities to the United
States, Europe's primary export gasoline export market, were
limited, with potential profits only sitting around $1.50 a
tonne.

* Later on Wednesday, traders will be watching the report on
U.S. fuel stocks from the Department of Energy at 1430 GMT, to
see if it tallies with Tuesday's report from the API. [EIA/S]

* Naphtha prices were discussed around $510 a tonne.

* Brokers said arbitrage opportunities to Asia were limited.

MIDDLE DISTILLATES <EURO/DIFF/GO>

* August gas oil futures rallied in early trade to near $500
a tonne and were trading at $497.25 by 1108 GMT.

* The prompt crack spread was little changed as gas oil kept
pace with rising crude and traded at $4.66 a barrel, down from a
close of $4.88 on Tuesday.

* The August/September contango narrowed slightly to $7.75
and the September/October contango traded at $8.25.

* Barges of gas oil with 0.1 percent sulphur traded at
discounts of between $5 and $5.50 a tonne to August gas oil
futures.

* Traders said that downstream suppliers were putting extra
product into local German storage sites which they estimated to
be about 70 percent full.

* Barges of 10ppm diesel were offered at premiums of $11.50
to August gas oil futures but nothing traded.

FUEL OIL <EURO/DIFF/FO>

* High sulphur fuel oil (HSFO) barges were bid around
$363-$365 a tonne fob ARA on Wednesday and in search of offers,
up from Tuesday's range at $357-$364.

* Crack levels weakened slightly, falling to around minus
$3.62 to dated Brent BFO-.
(Reporting by David Sheppard, Chris Baldwin and Emma Farge;
Editing by Jon Boyle)