Europe oil/products: Muted reaction to huge US gasoline build
London (Quantum Commodity Intelligence) - A measured fall in Brent Wednesday after the release of a bearish set of US oil product statistics underscored the bullish sentiment driving crude prices.
Cracks for key gasoline and diesel spot and swaps in Europe also matched crude, but this only consolidated the previous downward trend in anticipation of US refineries ramping up production.
By 1630 UK time, August Brent was trading at $72.28/b, still up $0.56/b from the same time Tuesday despite news of a 7 million barrels build in Us gasoline stocks and a 4.2 million barrel build in distillate stocks.
US crude stocks dropped 5.2 million barrels and reflected the surge in refinery utilization rates to 91.3% over the week to June 4, up from 88.7% a week earlier.
Brent continued to slide lower after 1630 UK time, but was still holding ground above Wednesday's settle by the time of press.
Products
Naphtha spot cracks in north Europe softened, similar to moves in Singapore and Japan earlier, but cracks in the forward curve were little changed.
Eurobob E5 prices rallied at 1630UK time because of a trade at $675/mt, despite very bearish EIA stock data for gasoline, but this largely brought the spot in line with the nearby curve, leaving the spot around $2.50/mt below July paper. But the market was softer during the day, trading at discounts of -$5, -$4 and -$3 versus July. Even premium unleaded gasoline was up $5/mt ($0.60/b) at 1630 UK time to keep in line with Brent.
Jet fuel prices rallied and cracks gained amid trades at higher differentials. The FARAG barge market traded at July LSG plus $19.50/mt, and the cargo market into Rotterdam and Le Havre traded at June plus $22.
Low Sulfur Gasoil futures kept pace with crude, and diesel barges traded at flat to June LSG ahead of its expiry Thursday. Cracks in the diesel barge curve were little changed as they continued to go sideways.
Fuel oil prices barely moved, depressing cracks. High sulfur fuel oil barges traded at $382/mt, the same as Tuesday, and marine fuel 0.5% sulfur traded between $495.50 and $495.85/mt, up a very slight $0.75mt.
