ARA gasoline stocks edge higher; naphtha stocks plunge to nine-month low: PJK

Gasoline stocks in Northwest Europe’s Amsterdam-Rotterdam-Antwerp hub rose by 64,000 mt, or 7%, to a fresh five-month high of 981,000 mt in the week ended November 15, data from PJK International showed.

ARA gasoline inventories are 1.8% higher than the 964,000 mt on November 16, 2016, according to PJK data.

Naphtha stocks in the ARA fell by 65,000 mt, or 27%, in the same period to a nine-month low of 176,000 mt, the data showed. The last time ARA naphtha stocks were lower was January 25.

Compared with last year, ARA naphtha inventories were 3.8% lower, as they amounted to 183,000 mt on November 16, 2016, PJK data showed.

Blending demand for naphtha is likely to remain tepid in the short term, market participants say, after a sudden decline in the NWE gasoline complex this week shrank the front-month mogas/naphtha spread — the premium of the front-month Eurobob gasoline swap over the equivalent CIF NWE naphtha swap — to a three-year low of $20.25/mt Thursday.

While naphtha held steady with healthy end-user demand balanced by supply, increased selling pressure in the gasoline barge market pushed down cash premiums and the Eurobob paper market weakened on bearish US stocks data and an already difficult arbitrage to the US.

Looking forward, many market participants remained hopeful that gasoline flows to West Africa will grow in December, while the current pull of gasoline cargoes from Europe to the Middle East and Persian Gulf is expected to last until the first quarter of 2018.