Northwest European Gasoline Margins Hit Two-Year High as Inventories Plunge

Northwest European gasoline refining margins climbed to $46.74 per barrel on Thursday, reaching their highest point since the middle of 2022. The surge in profitability for refiners is directly linked to a significant tightening of supply in the region's main trading hub.

Inventories Drop to Five-Year Low

The primary driver for the higher margins was a steep decline in gasoline stockpiles. According to data released Thursday by Dutch consultancy Insights Global, gasoline stocks held in the Amsterdam-Rotterdam-Antwerp (ARA) hub fell by approximately 14% in a single week.

This brought total inventories down to 752,000 metric tons, the lowest level recorded in nearly five years. Lars van Wageningen of Insights Global attributed the drawdown to a combination of higher exports out of the region and limited inbound shipments. He also noted that rising water levels on the Rhine River are a developing logistical factor.

Market Dynamics and Trading Activity

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Trading activity in the region was robust, reflecting the tight market conditions. According to market sources, transactions included:

• 13,000 metric tons of E5 gasoline barges, with Trafigura, Aramco, and Equinor selling to MB Energy and Vitol.
• 16,000 metric tons of E10 gasoline barges, where Exxon Mobil and Shell sold to Varo, MB, and BP.

Analysts note that while regional supply is tight, other market factors are in play. Jorge Molinero, an analyst at Sparta Commodities, said the gradual return of naphtha supply from the Middle East is reducing the "war-peak premium" that had built up in late July. Molinero also added that arbitrage opportunities for shipping gasoline to Asia remained viable.