Europe oil/products: Gasoline prices continue to fall despite flattish Brent

20 Jul 2021

Quantum Commodity Intelligence - Brent recovered Tuesday from morning lows below $69/b to close barely above the prior day settle, but gasoline prices slid further, driven by weaker RBOB prices.

September Brent was trading at $69.17/b at 1630 London time, just $0.06/b higher than Monday after the crash in prices in the previous session. 

But August and September RBOB contracts were down the equivalent of $3.50/mt and $5.25/mt at the same time, and European gasoline prices slipped lower as well. 

Distillate futures nudged higher, with August and September LSGO up $0.25/mt and $0.50/mt by the close to keep middle distillate prices and jet little changed.


Naphtha cargoes softened sharply, down $5.75/mt ($0.64/b) as the still wide backwardation eased in the nearby curve, with August vs September narrowing $2/mt to -$9.25/mt. The August paper for the spread above Japan naphtha also dropped $5.75/mt to $14.50/mt.

August propane cargo paper in north Europe fell $3.75/mt, moving down in line with Mont Belvieu. The spread was steady, with Europe around $50/mt above the US benchmark. The giant BASF petrochemical plant, Ludwigshafen Verbund, remains cut off from barge traffic flows by high water levels on the Rhine, but demand to Asia is strong.

Gasoline prices continued to fall despite little change in Brent at 1630 UK time. Eurobob E5 barges were assessed $3.25/mt (-$0.39/b) lower amid a slide in August and September paper, which were down $2.50/mt and $2/mt. E10 barges traded at $5.50/mt above August paper. The market was driven by further softening in RBOB, with August US gasoline down the equivalent of $2.50/mt and September down $3.25/mt by 1630 UK time.

A jet fuel cargo traded into Le Havre at $26/mt above August LSGO, and another cargo was also offered at $25/mt into Rotterdam. Two jet fuel barges traded at $24.75/mt above August LSGO, and a third at $0.50/mt above the high point for the underlying curve.

Diesel barge liquidity remained thin, but three cargoes traded into northwest Europe. Two 30,000/mt diesel cargoes were sold into Amsterdam at $4/mt above August LSGO, and a third was sold into Le Havre at $4.75/mt above. In the Mediterranean, a diesel cargo was sold into Lavera at $5.50/mt above August LSGO. Meanwhile, just two prompt diesel barges traded in ARA, at -$2/mt versus August distillate futures.

The spread between high sulfur fuel oil and marine 0.5% sulfur narrowed further, with gains of $2.50/mt in HSFO barges and a loss of $0.25/mt in marine 0.5% narrowing the spread to $110/mt. The spread between HSFO barges and 380 cst in Singapore also widened slightly, but only by $2/mt to $13.25/mt. The marine 0.5% spread to Singapore in August was steady at $20.75/mt. Singapore markets were closed earlier due to a national holiday.