The FOB Rotterdam gasoline front-month crack swap dropped to a near 10-month low, coming under pressure as Hurricane Sandy is expected to hit US demand more than supply, while the NYMEX November RBOB contract is due to expire today, traders said Wednesday.
After marking a modest recovery ahead of Hurricane Sandy hitting the US East Coast, the front-month crack swap fell back to $3.15/barrel at Tuesday's European close, the lowest since January 12 when it was assessed at $2.90/b, Platts data shows.
Wednesday morning, the November front month crack swap was heard pegged at $3.37/barrel.
"Overall, the consensus seems to be that [US] demand will be hit more than supply," a trader said of the impact of Hurricane Sandy on US market fundamentals.
However, so far the full impact of the hurricane on US fuel supply and demand is uncertain, another trader said.
"There's some substantial lost production too, so it's very difficult to know how the final balance will look."
Also, gasoline crack swaps were experiencing some downward pressure from the looming NYMEX November RBOB contract expiry, a third trader said.
"The front end is popping as the [NYMEX RBOB November contract] expiry looms. It means the expiry will be tricky again."
