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Europe Gasoline/Naphtha-Cracks dip lower but October exports pick up

Northwest European gasoline refining margins fell to $7.67 a barrel on Friday amid rising supply, but an increase in October exports could provide a floor to crack spreads.

In the Eurobob E10 market there were five trades at a total volume of 10,000 metric tons at a volume-weighted average of $806 a ton.

Shell was the day’s only seller, with BP and Varo each picking up 4,000 tons, and Totsa a further 2,000 tons.

One 1,000 ton Eurobob E5 barge traded in the afternoon window on Thursday at $830 a ton.

Eurobob E5 crack spreads fell by 59 cents a barrel on the day on Friday.

“The increase in supply plus a skew in crude availability towards more lighter grades will put pressure on margins as refiners seek to boost distillate output,” LSEG analyst Raj Rajendran said on Friday.

But crack spreads ended the week 41 cents higher than where they were a week ago on Oct. 20.

October gasoline exports to the U.S. and West Africa from Northwest Europe “staged a late recovery,” Rajendran said.

A total of 623,000 metric tons of gasoline will be shipped to the U.S. from Northwest Europe in October, according to LSEG data, up from 595,000 tons in September.

And exports to West Africa will reach a seven-month high of 932,000 tons this month, Rajendran said, up from 688,000 tons in September.

European gasoline market fundamentals are currently being driven by the U.S., one trading source said.

Euro grade finished gasoline cargoes are in good demand in the U.S., the source added.

Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub rose by 3% to 1.4 million metric tons in the week to Thursday, data from Dutch consultancy Insights Global showed.
Source: Reuters (Reporting by Robert Harvey; Editing by Richard Chang)

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