The Mediterranean gasoline cargo market has strengthened to a $8.50/mt discount to the Northwest European Eurobob barge market, the narrowest discount since March 22, Platts data shows, following demand into North Africa and potential flows to the Persian Gulf, market sources said Tuesday.
The arbitrage to the Arab Gulf is open, but North Africa is the main point of demand, a source said.
Algeria's Sonatrach at the end of April tendered for four 30,000 mt cargoes for delivery over May, market sources said, and purchased more than it tendered for.
"Sonatrach took seven to eight cargoes," one trading source said.
Sonatrach could not be reached for immediate comment.
"There are a few things that happened," another trader said of the strengthening Mediterranean gasoline market. "The east is higher so [Med cargoes] should arb to the Arab Gulf...the Sonatrach tender, and a perception of tightness."
The FOB Mediterranean gasoline cargo market Monday was assessed at $932.50/mt, a $8.50/mt discount to the FOB Amsterdam-Rotterdam EBOB barge value, from a $9.25/mt discount Friday. It is also markedly narrower compared with a $19.75/mt discount on May 7, Platts data shows.
"NWE is weak as well," the first source said, referring to the narrowing of the discount.
The FOB AR EBOB barge market has been assessed predominantly under its equivalent front-month swap for two weeks, assessed at a $2.75/mt discount Monday, and was heard trading at a $4/mt discount Tuesday.
A strengthening Asian market, with increased Indonesian imports and lower Taiwanese exports over June, has made the Mediterranean gasoline cargoes more attractive for the Red Sea and Persian Gulf, market sources said.
