Thursday, July 28, 2011

Europe Gasoline/Naphtha-Gasoline strong on tight supply

LONDON, (Reuters) - Tight supply continued to
support gasoline barge prices in northwest Europe on Wednesday,
boosting refining margins and helping the market shrug off
bearish data from the United States.

The Energy Information Administration reported that U.S.
gasoline stocks rose by 1.02 million barrels week on week,
exceeding consensus forecasts for a 400,000 barrel build.

Analysts also noted that U.S. gasoline demand figures were
weak. "To see summer gasoline demand down under 9 million is
pretty abysmal," said Carl Larry, director of energy derivatives
and research at Blue Ocean Brokerage in New York.

In Europe, prices remained bouyant despite thin trading as
the market is still tight. "Northwest Europe seems quite dry for
oil in the first half of August," said one gasoline broker.

"Lots has been flowing out to the U.S., West Africa and the
Middle East. I am hearing the arbitrage window is now closed but
lots has gone."

He added that gasoline components were expensive due to
tight supply following lower refinery runs, also impacting
gasoline supply.

In addition, Bulgaria revoked the tax fuel depot licences of
the 142,000 barrels-per-day Neftochim refinery, controlled by
Russian oil major Lukoil , effectively blocking its
operations and sales .

One gasoline trader said that with the Mediterranean market
so tight at the moment - partly due to Egyptian demand
and lower refinery runs - any unprogrammed
stoppage would affect prices.

Another trader said he had not seen many cargoes from the
Bulgarian Black Sea port of Bourgas lately, adding that he
thought the dispute had been going on for a while already.


* It was another quiet trading day with the summer holiday
season now well underway. No barges of benchmark Eurobob traded
in the window.

* Only 4,000 tonnes traded ahead of the window, at
$1,052-$1,058 a tonne fob ARA, with the price falling during the
day. This was still stronger than Tuesday's $1,043-$1,053 a
tonne fob ARA range, however.

* Trafigura and Mabanaft were sellers and Cargill, Gunvor
and Morgan Stanley were buyers.

* Some 3,000 tonnes of premium unleaded gasoline traded in
the window at $1,075 a tonne fob ARA, in line with Tuesday's
range of $1,074.75-$1,076 a tonne fob ARA.

* Northville sold 2,000 tonnes to Mabanaft and 1,000 tonnes
to Totsa.

* Eurobob's crack to dated Brent BFO- rose to $7.57 a
barrel, up from $6.09 a barrel on Tuesday.

* ICE Brent crude futures LCOc1 were down 11 cents at
$118.17 a barrel at 1552 GMT, after falling as low as $117.18
earlier in the session.

* U.S. RBOB gasoline futures RBc1 in New York were up 0.27
percent at $3.1620 a gallon, while the crack was up at $31.77 a
barrel, from $30.43.


* There were no trades in the European physical naphtha
window once again. Gunvor bid $999 a tonne cif NWE, and Glencore
offered $998 a tonne cif but then withdrew the offer.

* This was down from Tuesday's bid-offer range of
$1,002-$1,006 a tonne cif NWE.

* Naphtha is still being supported on product filtering into
the gasoline pool for blending, although a surplus in Europe has
also been reported by some.

* "Demand in the Mediterranean is absorbing some Black Sea
length," said one broker. "Red Sea product is seen as possibly
moving to Mexico and the U.S."

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