Northwest European Gasoline Margins Ease but Remain Elevated on Tight Supply

Northwest European gasoline refining margins retreated slightly on Monday but remained near historic highs, buoyed by tight regional supply and a high volume of trading activity. The key profit indicator for the region's refiners fell by nearly $1 to settle at $42.22 per barrel, according to market data.

Active Trading Underscores Tightness

The market saw a significant volume of physical trades, which helped provide a floor for prices. Key transactions on Monday included:

• A total of 22,000 metric tons of E5 gasoline barges changed hands, with ExxonMobil and Trafigura as sellers and BP, TotalEnergies, MB Energy, and Varo as buyers.
• An additional 8,000 metric tons of E10 gasoline were traded, with Shell and ExxonMobil selling to Varo and Trafigura.

In the Platts pricing window, TotalEnergies purchased three E5 barges from Trafigura and BP. Further highlighting the supply constraints, a bid from trading house Vitol for gasoline cargoes delivered to the Thames region failed to attract a seller.

Supply and Demand Outlook

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Looking ahead, consultancy Energy Aspects projects that gasoline supply in the Atlantic Basin will increase in the second half of the year. The firm forecasts a year-over-year supply increase of approximately 200,000 barrels per day, driven by limited refinery maintenance in the U.S. and Europe and the continued ramp-up of Nigeria's new Dangote refinery.

Despite the anticipated supply growth, Energy Aspects expects global gasoline inventories to continue declining through October. This trend is forecast to support near-term prices in the U.S. and Singapore, though the consultancy noted that the European EBOB market may require new bullish catalysts to extend its recent rally.

Broader Market Context

The energy market is also monitoring developments in the United States, where high fuel prices remain a key concern. According to the source report, the U.S. Energy Secretary was expected to meet with American energy companies on Monday to discuss ways to increase refinery output and lower prices for consumers amid ongoing geopolitical tensions.