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Europe plays increasing role in US gasoline market

07.05.2012  | 

The current state of the crude oil and refining industry in the Northern Atlantic basin has led to excess European gasoline production playing a vital role, says one analyst. That additional production could be saving the US East coast from shortages, he explains.


The current state of the crude oil and refining industry in the Northern Atlantic basin has led to excess European gasoline production playing a vital role, says Jeffrey Kerr, a New York-based analyst with GlobalData.

That additional European production is saving the US East coast from shortages, he said.

For its part, Europe has also seen its share of refinery closures over the past two years.

A combination of high crude oil prices and relatively low refined product prices, as well as dismal gasoline and middle distillate demand growth prospects, have resulted in a number of high-profile refinery closures and company bankruptcies, Kerr noted.

But the US East coast refining market has been impacted by the same factors, with large refineries in the Philadelphia area shut down, threatened to be shut down, or sold to new owners.

That has kept the supply of motor fuels tight amid the traditional summer driving season, when gasoline demand usually rises, Kerr explained.

“While it’s not new for Europe to send its excess gasoline to the US in the summertime, the magnitude of those shipments this year is much higher,” said Kerr, GlobalData’s senior analyst of downstream oil and gas.

“The shut refineries in the Philadelphia area and the Caribbean have really changed the dynamic of the East Coast marketplace, causing wide swings in cash market prices.”

Since the East coast gasoline cash market sets the price for the rest of the US through the futures market, European refiners are having a direct impact on US gasoline markets from coast-to-coast, he said.

For more details on the report, visit GlobalData’s website by clicking here.

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First of all you tell me why do we need to trust the market in the east and have you even stopped and see what your doing I work in the gas and oil business and since 1985 the market has never been the same . Do you also know that that has never been a shortage or demand on gas and oil. look what is happining in west texas after 80 years of drilling and yet you people sill don't care there is so much oil out there you can smell and taste it everyday plus so many reserve tanks full of oil. The bottom line I am sick in tired of all the excuses why this and that it it totally a sin of greed and lust for power and money and you really do not give a care about americans and the families today. It is not your oil God put it here not you and when you die and you will you will pay the price all you investors and rich companies who flat do not care. Yet you call this a wonderful america when truckers have to pay so much fuel for sorry food for you on the table and the farmer and rancher who works every day for you to eat and drink and one day it will be over with and I can't wait. Last thing you call yourself honest and happy and not guilty for trusting in our oil and gas when a child is in the hospital dying and has cancer or just one more breath of air to suck in to live and yet you sit there and continue to demand high price of gas. I would not take one dime of yours and the greed you all live in. May God have mercy on your soul. Oh buy the way I will not support a one world Goverment.

Bill Arnold

I am fascinated by the current wave of discussion about refining. Has our industry forgotten that crude oil is only valuable when turned into products by refining? The profit squeeze on refining is entirely the result of oil companies choosing to take their profits in the upstream and marketing functions whilst apparently forgetting that refining is not optional but absolutely necessary. The industry has to be vertically integrated one way or another, like it or not. Just try selling your crude oil when all the refineries have been closed because "they are not economic".

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