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Mediterranean gasoline market weakens to 10-month low versus swaps on oversupply

London (Platts)--8 Feb 2018 912 am EST/1412 GMT


The Mediterranean gasoline market weakened to a 10-month low versus the front-month Mediterranean swap Wednesday as cargoes were offered lower as oversupply lingered in the region.

The FOB Mediterranean gasoline cargo market was assessed at $623.75/mt Wednesday, down $12.50/mt on the day and assessed at a $7.75/mt discount to the March Mediterranean gasoline swap, down from a $4.25/mt discount Tuesday.

This represents the lowest value versus the front-month swap since March 17, 2017, when the FOB Med gasoline cargo was assessed at a $11.50/mt discount to April swap, S&P Global Platts data shows.

"There is a lot of oxy grade gasoline around...there is too much product versus the current spot demand," a trader said, adding that a narrower Med/North differential would reduce the incentive to bring gasoline from the Amsterdam-Rotterdam-Antwerp hub to the Mediterranean.

The front-month Med/North gasoline differential -- the spread between the front-month FOB Med 10 ppm cargo swap and the equivalent FOB Rotterdam Eurobob barge swap -- widened 75 cents/mt to a three-week high of $7.75/mt Wednesday. Overall, little fresh trading activity has been reported in the Mediterranean gasoline market this week amid lackluster spot demand in the region and closed arbitrage routes to the US and the Persian Gulf.

"The arbitrage is shut to the Persian Gulf, that never helps," a another trader said.

--Virginie Malicier, virginie.malicier@spglobal.com

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




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