13 September 2018, News Wires — Benchmark gasoline refining margins in Europe turned negative on Friday for the first time in nearly five years amid bloated stocks and weaker demand in the Atlantic basin.
Gasoline stocks in the Amsterdam-Rotterdam-Antwerp hub remain at a record high for this time of the year, according to data from PJK International, with disappointing demand for the fuel in the United States, a key export market.
Profit margins for converting crude oil into Eurobob gasoline were calculated at around -$0.906 a barrel at 1011 GMT, the lowest since Dec. 2, 2013, according to Refinitiv Eikon data.
The weak margins, also known as cracks, have prompted speculation that some European refiners would reduce their gasoline output in coming weeks, according to traders.
Overall refining margins in northwest Europe were below seasonal levels seen over the past three years. They were, however, supported by relatively strong diesel refining margins.
“Refining margins have clearly been responding to an oversupplied market in recent weeks, and with European markets struggling to find export destinations for gasoline volumes especially, the economic run cuts we have begun to see over September could well continue through the weeks ahead,” Vienna-based consultancy JBC Energy said in a note.
In the United States, benchmark gasoline refining margins RBc1-CLc1 were near their lowest levels since February 2017 after stocks on the East Coast rose last week to 70.6 million barrels, compared with 58.2 million a year earlier.
U.S. gasoline demand in August was down 1.5 percent from a year earlier at 9.61 million barrels per day (bpd) while in Europe it was down 1.3 percent at 2.01 million bpd, according to the International Energy Agency.