Northwest Europe Gasoline Margins Surge to Highest Since Mid-2022 on Tight Supply

Gasoline refining margins in Northwest Europe surged to their highest level since mid-2022 on Thursday, propelled by a sharp decline in regional inventories to a near five-year low.

Margins Spike Amid Inventory Plunge

The profit margin for refining crude oil into gasoline, a key indicator for refiners, climbed to $46.74 per barrel on Thursday, a level not seen since the middle of 2022. This spike coincided with a steep drop in gasoline stockpiles in the Amsterdam-Rotterdam-Antwerp (ARA) storage hub.

According to data released Thursday by Dutch consultancy Insights Global, gasoline inventories in independently-held storage in the ARA hub fell by approximately 14% over the past week. The total volume dropped to 752,000 metric tons, which the firm noted is the lowest level for the region in nearly five years.

Strong Exports and Trading Drive Drawdown

Lars van Wageningen of Insights Global attributed the inventory decline to a combination of increased exports and restricted imports into the region. He also noted that water levels on the Rhine River, a key transport artery, are recovering.

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The market saw robust trading activity, according to reports from the session:

• E5 gasoline: 13,000 metric tons of barges were traded, with sellers including Trafigura, Aramco, and Equinor, and buyers such as MB Energy and Vitol.
• E10 gasoline: 16,000 metric tons changed hands, with ExxonMobil and Shell selling to buyers that included Varo, MB, and BP.

Broader Market Context

Analysts are also monitoring related feedstock markets. Jorge Molinero, an analyst at Sparta Commodities, stated that a gradual recovery in naphtha supply from the Middle East is compressing premiums that had been elevated by geopolitical tensions in late July. Molinero added that arbitrage opportunities for shipping gasoline to Asia remain viable, supporting export demand from Europe.