Gasoline loadings to Europe hit counter-seasonal record
While the final days of the European driving season typically mark the end of peak gasoline demand, average loadings continue to break records as market participants redouble their efforts to ease exceptionally tight supply conditions across the continent. Intra-continent flows still account for the majority of gasoline arrivals in the region, but distillate cracks across ...
Gasoline loadings to Europe have reached a counter-seasonal record high, as market participants work to alleviate severe supply conditions across the continent. Intra-Europe trade remains the primary source of gasoline arrivals, but distillate cracking in Europe still favors diesel production over gasoline. Non-European gasoline shipments to Europe have eased some supply concerns, but the European market's outlook remains uncertain.
As of September 9, global gasoline/blending component loadings heading to Europe averaged 1.2mbd, which is 60% above the five-year seasonal average, marking the highest volume in Vortexa's dataset. Ninety-five percent of incoming barrels continue to be associated with intra-Europe-trade. Although relatively small, an uptick in non-European loadings since June has provided some relief to the market.
Imports from Northeast Asia and the Red Sea initially dominated non-European flows, following a partial lifting of China's refined products export ban and Saudi Arabia rerouting shipments away from Houthi threats in the Bab-el-Mandeb. More recently, these barrels have been replaced by volumes from the Atlantic Basin, specifically from the South American East Coast and the Gulf of Mexico.
Brazil's favorable conditions for ethanol production have created space for gasoline exports, while the United States saw record exports of both gasoline and other transportation fuels due to near-100% refinery utilization rates. Even with weaker margins, the crack remains 30% higher than the same period last year. While stronger gasoline margins should encourage refineries to shift production towards light ends, they are outweighed by the higher distillate margins.
Northwest European diesel and jet fuel margins are approximately triple gasoline margins, and the market is preparing for a seasonal rise in diesel demand, which will be influenced by Russia's diesel barrel shortage. Backwardation remains wide despite high gasoline loadings, with the September-October figure standing at $15/b on September 8, before narrowing to $10/b the following day.
This ongoing uncertainty indicates that the end of the summer driving season does not necessarily signal major changes for the European gasoline market.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
