Story
Northwest European Gasoline Margins Climb as Crude Oil Retreats from $100 High
Northwest European gasoline refining margins strengthened on Friday, climbing $1.81 to settle at $32.67 per barrel. The increase was primarily driven by a retreat in crude oil prices after they briefly touched the $100-per-barrel mark in the previous session for the first time since May.
Market Drivers
The profitability of producing gasoline, known as the refining margin or crack spread, is heavily influenced by the cost of its primary input, crude oil. The recent easing of crude prices provided a direct boost to these margins for refiners.
Crude's recent surge was fueled by rising geopolitical tensions and the potential for shipping disruptions in the Middle East. According to reports, the Iran-aligned Houthis declared a naval blockade against Saudi Arabia on Monday, elevating the risk to global energy supply chains.
Shipping and Trading Activity
AdThe security situation is having a tangible impact on logistics. Torm, a Danish tanker owner, confirmed Friday that its vessel, the Torm Innovation, will be rerouted to Asia via the Suez Canal to avoid the southern Red Sea.
Trading activity in the region's physical gasoline market on Friday included:
- Eurobob E5: 2,000 metric tons of barges were traded on Argus, with Sahara selling to Gunvor. Shell also sold an E5 barge to Trafigura in the Platts window.
- Eurobob E10: A total of 4,000 metric tons of barges changed hands, with Trafigura selling to Varo.
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