Europe gasoline prices rise by up to 5% in first half of May

15 May 2013 15:36  [Source: ICIS news]

LONDON (ICIS)--European gasoline, or petrol, prices rose by up to 5% during the first half of May - increasing by an average of $36/tonne (€28/tonne) - despite a mostly closed arbitrage to the key US export market, industry sources said on Wednesday.

The rise in June ICE Brent crude oil futures over the period is seen as the primary dirver behind the gasoline price movement, a gasoline trader said.

June ICE Brent crude oil futures rose from  $99.04/bbl at 16:30 GMT on 1 May to $102.31/bbl around 10:40 GMT on 15 May.

On Wednesday morning, gasoline traded at $945/tonne FOB (free on board) ARA (Amsterdam-Rotterdam-Antwerp), up from $902-917/tonne on 1 May.

Chevron sold 1,000 tonnes of the European EuroBob gasoline grade to Cargill. EuroBob grade is considered a benchmark in the physical gasoline markets in northwest Europe.

Gasoline futures contracts also increased in line with the higher crude oil futures contract.

June ICE RBOB gasoline futures rose by a similar margin to physical gasoline - by 4.6% - from $2.7052/gal at 16:30 GMT on 1 May to $2.8300/gal around 10:28 GMT on 15 May.

Meanwhile, there are signs that exports to the US might be picking up. The gasoline trader said: "Seems the arbitrage to the US has opened recently."

Gasoline fundamentals in US and Europe, along with domestic petrochemical margins, have traditionally charted the course of naphtha demand in Europe.

The main application of naphtha is in the petrochemical production of olefins. Naphtha is also used as a feedstock for gasoline blending.

($1 = €0.77)

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By: Cuckoo James
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