Gasoline rallies on US outages, China rebound

Quantum Commodity Intelligence - Gasoline cracks rebounded over the holiday period as winter storms shut in around 20% of US production, while demand received a boost from the relaxation of China's strict Covid measures.

European gasoline cracks nearly doubled in the last week, Eurobob oxy E5 barges seen changing hands Wednesday at $752.50/mt, equivalent to around $6.25/b over ICE Brent at 13:00 GMT - a five-week high. 

Shut-ins at several US Gulf refineries over the holiday period have driven the rebound, RBOB gasoline cracks hitting a four-month high of $16.50/b premium to ICE Brent on 23 December. 

RBOB gasoline cracks are back to around $15/b on Wednesday, but still 50% higher than the middle of December as freezing temperatures knocked out around a fifth of US Gulf coast capacity.

Most refineries affected are expected to be back online shortly, although it will likely be a few weeks before the US refining hub returns to full capacity.

Brokers told Quantum Wednesday that transatlantic export demand was still a little flat, although US tightness should help clear excess gasoline built up in northwest Europe from late November.

The impact of the storms on demand is still unclear, brokers said, with many residents in eastern US states shut in for several days. 

Longer term, gasoline demand should receive a boost from the relaxation of China's strict Covid measures as mobility rebounds. 

Asia gasoline refining margins hit a six-week high of $6.55/b premium to ICE Brent on Wednesday, with 92 RON Singapore cargoes up nearly 30% against crude from a week ago.

Health authorities decided at the weekend to no longer publish daily Covid data, having downgraded its classification from category A to category B, effectively scrapping the isolation of infected cases, contact tracing and classification of at-risk areas.