By PRIYANKA SHARMA and LANANH NGUYEN
Gasolines crack, a measure of refining
profit, fell to the
lowest in almost five months in Europe as domestic demand
declined and supplies surged in the US, the continents
main export market.
The crack, or premium to Brent crude, fell 3 cents to
$8.54/bbl, according to data from PVM Oil Associates Ltd., a
broker in London. Thats the least since Feb. 28 and is
down 36% this month. Gasoline supplies in northwest Europe
are the highest for this time of year since 2010, while US
supplies climbed to the most in four months.
Demand in Europe is lackluster, said Steve
Sawyer, an analyst at FGE, an energy consultancy, by phone
from London on July 25. Europe
relies on demand in the US,
which is starting to wane.
Europe consumed 1.92 million bpd of gasoline in April, the
most recent month available in data from the International
Energy Agency. Thats down 30,000 bpd from the previous
year and 3.5% lower than the average in 2012, data from the
Paris-based adviser to 29 nations show.
Gasoline stockpiles held in independent storage at the
Amsterdam-Rotterdam-Antwerp oil hub rose 5.3% to 873,000
metric tons in the week to July 24, according to data from
PJK International BV, a researcher in the Netherlands.
typically sells its surplus
gasoline to the US, where refiners have boosted domestic fuel
production amid rising crude output from shale deposits.
Thats reduced the nations need for imports,
exacerbating the oversupply in Europe.
US refineries are running at peak utilization,
Ehsan Ul-Haq, senior market consultant at KBC Energy
Economics, said by phone on July 25 from Walton-on-Thames,
England. So the US produces more than enough gasoline
and doesnt need too much from Europe any more.
utilization in the US has
been stable at 93.8% since July 11, the highest level since
2005, according to US Energy Information Administration data.
The crack will weaken further, Sawyer said. Ample
supplies will cause US prices to drop, diminishing the profit
an refiners who intend to
shiptransatlantic cargoes of gasoline, Sawyer said.