June 18, 2012 / 6:04 PM / 8 years ago

Europe Product Swaps-Gasoline firms with tighter Eurobob supplies

LONDON, June 18 (Reuters) - Outright gasoline and naphtha
swaps fell on Monday, in line with crude losses, as Greek debt
woes weighed on global markets, which were only briefly buoyed
by the election of a pro-bailout government.
    However, gasoline cracks were supported by slightly firmer
demand due to the summer driving season in the United States.   
    Refiners were said to be favouring making gasoline suitable
for the U.S. market rather than blending the European benchmark
grade, Eurobob, into premium unleaded used by consumers. As a
result, prompt supplies have tightened. The arbitrage to the
West opened last week after one month's closure. 
    The closure of Petroplus' 175,000 barrels per day Coryton
refinery in the UK added further tightness to the European
market. The joint administrator said two weeks ago it would
start shutting down.   
   A trade union official said on Wednesday that oil major
Shell, fuel distribution firm Greenergy and storage company
Vopak were preparing a joint bid to buy Coryton as a storage
    Diesel swaps firmed as lower flat prices enticed consumers
back into the market after a long period of staying away. German
demand for heating oil tanks was supporting levels in
    Meanwhile, jet swaps fell with lacklustre demand as a weak
global economy weighs on holiday makers.     
    * The prompt June contract was at around $928 a tonne, down
from $936 a tonne last Monday. July was set at $904 a tonne
falling from $916 a tonne. August was at $881 a tonne.
    * The backwardation between June and July widened slightly 
to $24 from $20 a tonne.
    * June crack firmed to $15.60 a barrel, up from $12.46 a
barrel. July rose to $12.60 from $10.24 last Monday, and August
was at $9.96 a barrel.
    * "Cracks are up in the North due to diminished willingness
to blend eurobob," one trader said, "The margin is high enough
to blend U.S. grades and export so they prefer to use lower
quality grade for that purpose instead of blending eurobob. Plus
Coryton is adding pressure."
    * Naphtha swaps continued to fall with crude oil. 
    * The June contract at $742 a tonne cif NWE down from
$758.64 a tonne last Monday. July was at $744 a tonne, falling
from $764.39 and August at $748 a tonne from $770.39 a tonne.
    * The contango structure flattened greatly on the week. The
June and July spread narrowed to $2.00 a tonne from nearly $6.00
last week.
    * Crack swaps firmed compared with last Monday but were down
on Friday's levels as rumours of additional supplies coming to
Europe weighed on sentiment, one market participant said.
    * The June crack swap was at minus $13.50 a barrel, up from 
minus $14.48 a barrel last week. 
    * The market only barely held onto its slight contango
structure as the June/July spread narrowed to less than a $1.00.
    * The July and August swaps were only slightly higher at
minus $13.20 and $12.70, respectively, up from at minus $13.65
and minus $12.74 a barrel. 
    * Front month ICE gasoil futures were trading at
$843.75 at 1623 GMT, below last Monday's close at $851.25.
    * June/July backwardation LGO-1=R narrowed to $4.75 a
tonne from $5.75 a tonne since last week.
    * Trade of June gasoil barge swap differentials was quite
illiquid and unrepresentative of the market, one trader said, as
the month is nearing its end.
    * The July gasoil barge swap was up slightly to plus $1.50 a
tonne, from around plus $0.25/1.25 a tonne last week. August was
at plus $1.25 while third and fourth quarters were at plus $1.00
and $0.75, respectively. 
    * The gasoil barge swap for calendar 2013 was at plus $0.75.
    * June diesel barge swap differentials rose to $20.50 a
tonne up from $14.75/15.50 a tonne. July was at $16.50 and
August at $16.25.
    * Third and fourth quarter diesel barge swaps were at $16.35
a tonne and $19.25/19.75 a tonne, respectively. 
    * Swaps on North West Europe cargoes were at $24/25.50 in
June, $19.75/20.25 in July and August was at $18.5/20 a tonne.  
    * The June jet fuel swaps fell $59 a tonne on the week, down
from $62.50/63.50 a tonne. July was largely on par at around $59
a tonne.
    * The fall was attributed to ample prompt supplies as a weak
global economy hits demand for flights despite summer holiday
season, one trader said. 
    * The August/July spread widened to just over $3.00 from 
$2.50 last week. August was $63/64 a tonne, down from around
$65.50 last week. 
    * The third quarter eased to $93 a tonne from $64.50/65.50 a
    FUEL OIL  
    * The balance June hilo was at $27.50, while the July hilo
fell to $27.50/28.50 a tonne down from $35.75 last week. 
    * The August price was at $30.25 a tonne and September at
$30.50 a tonne.

 (Reporting by Julia Payne, Additional reporting by Simon Falush
and Claire Milhench; editing by James Jukwey)
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