The June Northwest European-US Atlantic arbitrage swap has risen since market close Friday due to a higher NYMEX RBOB market, increasing the possibility of exports from Europe heading to the Atlantic coast, market sources said Monday.
During morning European trade, the June NWE-USAC arbitrage swap was heard at 11.10 cents/gal, up from 10.60 cents/gal at 1530 GMT Friday, trading sources said.
"It is stronger than Friday...as one would expect coming into the driving season," a trading source said.
However gasoline market has yet to experience any real seasonal increase in demand.
The most recent US Energy Information Administration data showed a 1.175 million barrel gasoline stock rise in the US Atlantic Coast to 61.725 million barrels, the highest since March 2012, 13.5% above the rolling five-year average for the week.
"But its not looking like a very firm gasoline season for sure," the trading source added.
The EIA's April Short Term Energy Outlook said that gasoline demand for this summer was anticipated to be at a 12-year low.
The NWE-USAC arbitrage swap is a measure of the relative strength of the FOB Amsterdam-Rotterdam-Antwerp Eurobob swap versus the NYMEX RBOB, and is used as an indicator and hedging instrument for exporting gasoline from Europe to the US Atlantic Coast.
Physical RBOB barge differentials in the USAC also rose over the day Monday, moving into positive territory for the first time since January 10, and were assessed at a premium of 35 points/gal, from a 15 point/gal discount to the front-month Nymex RBOB, Platts data shows.
