Europe oil/products: Gasoline and diesel cracks gain after US EIA report

21 Jul 2021

Quantum Commodity Intelligence - Diesel and gasoline prices rallied and cracks rose versus Brent while propane prices saw only modest gains after the US Energy Information Administration report Wednesday.

Brent extended earlier gains to reach $71.82/b by the late afternoon marker, up $2.65/b from the same time the prior day.

The first US crude stock build in 9 weeks, 2.1 million barrels higher, caught the eye, but the market was also buoyed by healthy US product demand and a very small build in products stocks compared to last week.

Both US gasoline stocks and implied demand were flattish week-on-week, while there was a draw in middle distillate stocks, down 1.3 million barrels, and a rise in implied demand.

The Rhine remained closed from Speyer in Germany upwards, and gasoline stocks in ARA are expected to draw again this week, while gasoil and diesel stocks are expected to build.


US propane stocks built 3.1 million barrels last week and the news caused propane cargoes in north Europe to gain only $11.50/mt ($0.90/b). At the same time, August paper for Mont Belvieu was up the equivalent of $7.75/mt from Tuesday, according to brokers. The volatile propane spread below naphtha cargoes ballooned out $12.50/mt to $43/mt. Naphtha cargoes in northwest Europe were assessed $24/mt ($2.69/b) higher, in line with the crude move. Backwardation remains wide at the front of the curve.

Trade was average in the gasoline barge market, despite only one trade seen in Eurobob E5, with some 10,000 mt of E10, and 12,000 mt of premium unleaded barges changing hands. The RBOB curve saw healthy gains, with August up the equivalent of $27.25/mt at 1630 UK time, reversing Tuesday’s losses, and lifting European gasoline prices. Spot Eurobob barges were assessed $27.75/mt ($3.31/b) higher. Premium unleaded barges were assessed at $703/mt, up $28/mt ($3.36/b) amid a flurry of trades at that level.

Jet barges and cargoes were both defined by bids and offers at $25/mt and $26/mt above August LSGO, to leave price differentials at $25.50/mt. Prices were lifted by the rally in distillate futures following the US inventory report. Cargo prices gained $22.50/mt ($2.85/b).

After the prior day flurry of activity, the diesel market dried up again, and there were no trades seen for either barges in ARA or cargoes. Prices were lifted by futures, with August and September gaining $22 and $21.75/mt respectively ($2.95/b and $2.92/b) to lift distillate cracks after the US saw a draw in middle distillate stocks. Gasoil and diesel stocks are expected to build this week because of the closure of the Rhine.

High sulfur fuel oil barges traded in a narrow range of $388 to $389/mt, raising prices $17/mt ($2.67/b) from Tuesday, while marine fuel (0.5% sulfur) traded in the narrower range of $498/mt, up $16.50/mt from Tuesday.