European Gasoline Margins at 4-1/2 Month High
Benchmark European gasoline refining margins spiked nearly 9 percent on Tuesday to their highest since April after more than 2 million barrels per day (bpd) of U.S. refining capacity was knocked offline by Hurricane Harvey.
Margins, a measure of the profit that can be made from refining crude into gasoline, hit $15.45 a barrel in morning trade.
Harvey knocked out 13 percent of refining capacity in the United States, the world's largest oil consumer, while the ongoing rain and flooding threatened other units, including the country's largest refinery.
The shutdowns are expected to prompt a late-year spike in gasoline bookings from Europe to compensate for the production losses. Buyers in the United States and in Latin America, which has been reliant on U.S. exports, could turn to Europe, traders said.
"Owners are being asked to provide transatlantic options on cargoes being shipped out of the Med or NWE with the view to diverting cargoes to the United States or Latin America," said Andrew Wilson, head of energy research with shipping firm BRS Brokers.
U.S. gasoline prices surged to two-year highs on Monday at $1.7799 per gallon. They traded at $1.7014 a gallon at 1039 GMT.
Between Friday and Tuesday, at least eight vessels were booked to sail from Europe to the United States, trade sources told Reuters, a slightly higher figure than normal and above the muted level seen in recent weeks, as buyers slowed their imports towards the end of the summer driving season.
Reporting by Ahmad Ghaddar and Libby George
