Brent and N.W.E Gasoline closed Friday, virtually unchanged day-on-day, at 83.25$/bbl and 870.15 $/MT respectively for the front-month Swap contract. This occurred despite Ukraine launching a drone attack on the Russian oil refinery at Novorossiysk in the early hours of Friday morning.

Global gasoline margins have been showing signs of softening, despite the approaching summer driving season – which typically marks the peak of seasonal gasoline consumption. Weekly DOE figures indicate that US gasoline demand remains below last year’s levels, reaching its lowest point in a decade, despite a slight weekly increase. (Source: BNEF and DOE)

In contrast to weak US gasoline margins in April and May, European gasoline margins have increased year on year, incentivising refineries to optimize gasoline production and blending operations also amid poor petrochemical demand. (Source: Vortexa)

Transatlantic Gasoline cracks are trading at historically record level: Ebob Cracks rebounded above 21 $/bbl in the front month spreads, recovering from the losses of the previous week. (The chart below shows the three-week closing of NWE Gasoline cracks).

Ongoing inefficiencies in the energy system, affecting both refining capacity and logistic (all legacies of Covid and Russia), are partly responsible for such strong Gasoline cracks levels.

Last week, Gasoline stocks held in independent storage in the Amsterdam-Rotterdam-Antwerp (ARA) refining and storage hub fell by 7.5% during the week to Thursday, with Gasoline stocks standing at 898,000 metric tons, their lowest since late January, amid slowing blending activity. US Gasoline Stock also fell last week to 227.8 million barrels, down 0.2 million barrel versus previous weekly inventory data.

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