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Mediterranean gasoline expected to soften in May

London (Platts)--21 Apr 2017 928 am EDT/1328 GMT


The Mediterranean gasoline complex is likely to soften for May loading dates, after a period of tightness for end-April loadings, market sources said.

"I think if you look at May loading you will be able to find a cargo," one market source said.

A second market participant said refineries in the region were tendering volumes for sale this week without attracting buying interest.

This comes amid increasingly difficult arbitrage routes out of the Mediterranean. The spot arbitrage to the Persian Gulf has become difficult to work as have trans-Atlantic exports, after recent flows to Latin America.

Local spot demand in the Mediterranean remained visible, but was unable to provide sufficient support. According to the first market source, North African buying interest was visible but not unusually strong. The second source said North African shorts were focused on the second half of May.

Mediterranean gasoline cargoes were assessed at $556.50/mt Thursday, down $11.50/mt on the day and at a $7.25/mt premium over the May Mediterranean swap, down from a $7.75/mt premium Wednesday. A softening Mediterranean gasoline complex was also reflected in the paper market, despite the seasonal expectation of a lower Med/North in the summer months.

The April Med/North differential -- the spread between the May FOB Med 10 ppm cargo swap and the equivalent FOB Rotterdam EBOB barge swap -- traded at plus $1/mt in Thursday's afternoon trading session. The May Med/North differential, on the other hand, stood at minus $4.50/mt at London market close from minus $3.50/mt Wednesday.

--Fabian Weber, fabian.weber@spglobal.com

--Edited by Jonathan Fox, jonathan.fox@spglobal.com




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