Northwest European Gasoline Margins Fall Over $3 on Swelling Inventories

Northwest European gasoline refining margins fell by more than $3 on Friday, settling at $38.64 per barrel, as a significant build in regional inventories and limited trading activity weighed on the market.

Key Drivers of the Decline

The primary pressure on margins came from a sharp increase in available supply. According to data from Insights Global, gasoline stocks held independently in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub surged by 21%. The firm attributed the build to a combination of higher refinery production, reduced inland demand, and a lack of export opportunities.

Trading activity was subdued, further contributing to the downturn. Data from Argus showed just 2,000 metric tons of Eurobob E5 barges were traded, with Sahara selling to Gunvor. A separate transaction saw Trafigura sell 4,000 tons of Eurobob E10 barges to Varo.

Regional Supply Picture

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The supply glut was not limited to gasoline. Naphtha stocks in the ARA hub climbed 31% to their highest level since February, driven by an increase in imports arriving in the region.

Meanwhile, in a move that could tighten long-term fuel supplies, the Russian government announced on Thursday that it was extending its export bans on both diesel and gasoline until January 31, 2027.

Market Outlook and Commentary

The recent strength in refining margins has had a direct impact on consumer prices. A European Central Bank blog post published Friday noted that rising refining margins, which have been near record levels, were a key contributor to higher fuel prices across the euro zone in recent months. The post suggested that margins could see a further increase in August before starting to decline.