The Mediterranean gasoline July cargo swap has risen to a premium to the July Eurobob barge swap, as lack of availability of prompt cargoes in the Mediterranean supports the market, trading sources said Wednesday.
The bullish Mediterranean market is also opening an arbitrage from the Northwest European market, sources said.
The July Med/North was heard trading at a premium of $2/mt Wednesday morning, from being assessed at a $1.50/mt discount Tuesday, and up from a discount of $8/mt June 18, Platts data shows.
The prompt tightness caused the backwardation in the July/August FOB Med gasoline cargo swaps to widen to $19.75/mt Tuesday from $17.50/mt Monday, Platts data shows.
The fresh support for the Mediterranean gasoline market came from a new tender by Algeria's Sonatrach, which tendered to buy four cargoes last Thursday, for delivery over July. A source at Sonatrach declined to comment at the time.
The bullish Mediterranean market also increased the probability that cargoes will be sourced from the NWE market.
"It means it is easier to move from the North," a Mediterranean trading source said, adding that the move was looking more viable.
The FOB Mediterranean cargo value was assessed at a $22.25/mt premium to FOB Amsterdam-Rotterdam EBOB barges, Platts data shows.
The cost of shipping a 30,000 mt cargo from the Amsterdam-Rotterdam-Antwerp hub to North Africa, was pegged at around $11.50/mt by a source Wednesday.
The Mediterranean gasoline trader also said that a supply of cargoes from NWE could put pressure on cash premiums in the Mediterranean market.
A falling Northwest European gasoline market has also contributed to the July Med/north premium.
The latest US American Petroleum Institute data showed a US gasoline stock rise of 1.334 million barrels last week to 223.306 million barrels.
This news added to bearish sentiment in Europe because the US market has been drawing few incremental cargoes recently.
The July EBOB barge crack swap was heard trading at $10.21/barrel, from an assessment of $10.60/b Tuesday, and $11.05/b Monday, Platts data shows.
