Europe gasoline cracks struggling to recover

London (Quantum Commodity Intelligence) - Summertime gasoline refining margins for Eurobob E5 barges in ARA have rallied this week but have yet to recover the ground lost from mid-April, likely reflecting concerns over the impact of the Covid-19 crisis in India on global demand.

Brent futures hit a month high Thursday, lifting Eurobob barge and nearby swaps.

Crack levels for May, June, July and August swaps versus Brent futures at 1630 UK time rose to $10.38/bl, $10.69/b, $10.62/b and $10.14/b respectively, up 26 cts, 19 cts, 12 cts and 9 cts from the day before.

But the refining margin indicators still trailed levels last seen on April 19, and sharply lower than levels at the start of April when Brent futures were over $5/b lower.

Eurobob gasoline cracks in Europe started to turn south on April 20, and hit a month low on April 27 when the summertime cracks of May, June, July and August Eurobob paper fell to $9.68/b, $10.06/b, $10.10/b and $9.65/b respectively.

The nearby Brent curve jumped more than $2.25/b between Tuesday and Thursday 1630 UK time.

Summertime Eurobob crack levels have responded with May, June, July and August paper gaining 70 cts/b, 63 cts/b, 52 cts/b and 49 cts/b over the same two days.  

But as a percentage above Brent futures, Thursday's Eurobob crack values were still lower than seen on April 23.

Energy consultants Rystad expect the India Covid-19 crisis will create a surplus in oil liquids of 900,000b/d this month and 1.4 million b/d next month.