Global gasoline cracks rally Thursday after US inventory report

Quantum Commodity Intelligence - Global gasoline cracks values jumped higher at the close of the Singapore market Thursday, while backwardation widened in the European gasoline market after Wednesday's US weekly oil inventory report.

Although US gasoline stocks built 1 million barrels last week and implied demand fell back after the Independence Day holidays, US refining utilization rates also slipped 0.4 percentage points lower and could fall further this week which could improve arbitrage opportunities from Europe.

Cracks for RBOB gasoline versus Brent were rallying, with August values up $0.80/b at the time of the Singapore close (0830 GMT) to $23.1/b, compared to $22.30/b Wednesday in Europe at 1530 GMT, and there was a knock-on effect on Europe and Singapore paper. 

Eurobob E5 barges in ARA were trading at $7/mt ($0.84/b) above August paper Thursday morning, up from $5/mt ($0.60/b) during Wednesday, brokers said.

Cracks for August Eurobob gasoline paper against Brent were pegged around $12.50/b at the time of the Singapore close (0830 GMT), up $0.50/b from $12/b on Wednesday.

Premium unleaded gasoline paper in the Mediterranean also responded, with cracks for August paper versus Brent up around $0.50/b to $12.40/b.

Nearby cracks for 92 RON gasoline versus Brent in Singapore gained less than Europe, with cracks for August paper up around $0.30/b to $8.75/b, broker data showed. 

US gasoline sales, or implied demand, dropped to 9.28 million bpd last week, down from the all-time record high of around 10 million bpd over the week to July 2, but the demand figure was still higher than the 9.17 million bpd over the week to June 25, according to the US Energy Information Administration.

September Brent was down $2.41/b at the time of the Singapore close from 1530 GMT in Europe on Wednesday and the backwardation was easing slightly, with the spread between September and November Brent narrowing $0.09/b.