Europe oil/products: Gasoline and naphtha lead the rally in Europe

22 Jul 2021

Quantum Commodity Intelligence - Brent rallied Thursday helped higher by Wednesday’s Energy Information Administration report and continuing to correct following Monday’s crash that saw the crude future tumble under $69/b.

The main reason for the unexpected 2.1 million-barrel rise in US crude stocks build last week was a rise in imports and a drop in exports, sources noted, while stock builds were also concentrated on the West Coast and inventories at Cushing fell to their lowest level since January 2020.

September Brent was trading at $72.89/b by 1630 London time, up $1.07/b from the same time Wednesday.


Naphtha cargo prices jumped $17.50/mt ($1.96/b) to $669/mt, and the market remains very tight in northwest Europe, sources said. The spread between August and September paper widened again amid the crude rally to -$10.75/mt.

In contrast, propane cargo prices gained $9/mt ($0.70/b) to $617.50/mt, and the backwardation above August paper was just $2/mt, with August and September paper flat. Propane stocks built 3.21 million barrels in the US last week.

Eurobob gasoline barge trade was very thin again, but prices and cracks gained, with the market assessed $13.75 ($1.65/b) higher at $713.25/mt, or around $6/mt above August paper. E10 was assessed at the same level. There was a flurry of trades in the premium unleaded barge market between $718/mt and $721/mt up to the 1630 London time close. Premium unleaded was assessed at $721/mt, up $18/mt ($2.18/b). RBOB was rallying.

Jet cargo prices rose $9.75/mt ($1.23/b) to $619.75/mt. Differentials continued to gain, with the cargo market bid into Le Havre at $27.50/mt above August LSGO, while it was also offered at $26/mt into Rotterdam. Jet barges traded at $16/mt above August LSGO and then was bid on at $26.25/mt. Singapore jet was stronger earlier in the day.

Diesel barges gained $9.25/mt ($1.24/b) to $592.25/mt. The differential below August LSGO narrowed from -$1.50/mt the prior day to -$0.75/mt, where it traded three lots. Diesel cargo differentials were unchanged. Gasoil was strong and the Mediterranean saw a bid for cargo into Egypt at $1.50/mt above August LSGO. Gasoil barges were also strong, pegged at $7/mt below August LSGO.

After narrowing for a few days, the spread between high sulfur fuel oil barges widened Thursday, with HSFO up $2.75/mt and marine fuel (0.5% sulfur) up $6/mt. Both markets remain in backwardation. Sources said a DMA barge traded at -$15/mt versus August LSGO.