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Europe Gasoline/Naphtha-Slack demand weighs
July 25, 2012 / 5:05 PM / 5 years ago

Europe Gasoline/Naphtha-Slack demand weighs

 LONDON, July 25 (Reuters) - Gasoline refining margins slid
further on Wednesday, as the lack of demand from the U.S. and
other regions, coupled with high refining runs weighed on the
market.
 Gasoline refining margins have dropped steadily this month,
falling from over $19 a barrel in the first week of July to
below $11 a barrel this week.
 The swing lower has been attributed by traders to a
combination of factors, including less demand from the region's
traditional export markets and a technical correction after
margins were pushed higher by steep losses in Brent in June.
 On the supply-side, refining rates have picked up in Europe 
and the U.S., boosting output either side of the Atlantic.
 The U.S. has been buying less gasoline from Europe than
traders had hoped, with the arbitrage window remaining shut for
much of the driving season, when demand usually peaks.  U.S.
gasoline demand was down 3.2 percent from year-ago levels, U.S.
government figures showed on Wednesday.
 In addition, less gasoline is being sold to Nigeria where a
probe into a corrupt subsidy scheme and lack of funds to pay for
further deliveries is deterring firms from importing motor fuel.
 Shortages are already causing long queues at the pump in
some parts of the country.  
 Nigeria's state-oil company said on Wednesday it was owed $7
billion in government fuel import subsidies, more than the sum
held in Nigeria's Excess Crude Account (ECA). And the state oil
firm is just one of a string of importers who need to be paid.
 
  Two fuel import unions have threatened to strike this week
over unpaid subsidies, while the state oil firm said NNPC said
it had 46 days of fuel supplies and it would do its best to meet
demand despite "limited resources." 
 Nigeria would have to act fast to resolve the problem,
traders said, because it takes almost three weeks to deliver a
cargo of gasoline from northern Europe, and the remaining fuel
suppliers were lower than indicated by the government.
 "Our calculation is 28 days," said another gasoline trader,
commenting on gasoline reserves in Nigeria.
 GASOLINE 
 * No barge of benchmark Eurobob traded in the window. Ahead
of the slot, prices fell from $960 to $942 a tonne fob ARA, well
below prices of $967 a tonne fob ARA on Tuesday. 
 * The volume-weighted average was $952.44 a tonne, a broker
said. BP sold all of the barges to Gunvor, Statoil, Shell and
Cargill.
 * Eurobob's crack to dated Brent BFO- was at around $10.48
a barrel at 1642 GMT on Wednesday, down from $11.95 a barrel at
the close on Tuesday.
 * One barges of premium unleaded gasoline traded in the
window at $959 a tonne fob ARA, down from $986-$991 a tonne fob
ARA on Tuesday. Vitol sold to Philips 66.
 * ICE Brent crude futures were down up 40 cents at
$103.02 a barrel around the same time.
 * U.S. RBOB gasoline futures were down 2.65 percent
at $2.7500 a gallon around the same time.
 * RBOB's crack to U.S. crude futures RB-CL1=R was trading
at $24.62 a barrel, down from $25.98 a barrel at the close on
Tuesday.
 
 NAPHTHA NAF-C-NWE
 * Two cargoes traded at $813-$814 a tonne cif NWE, down from
 $830-$831 a tonne cif NWE on Tuesday.
 * BP and Gunvor sold to Vitol.
 * Margins continued to erode, falling to around minus $11.88
a barrel, down from around $10.28 a barrel on Tuesday afternoon.

 (Reporting by Jessica Donati, editing by William Hardy)
 
 

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