The Northwest European gasoline market backwardation steepened to its highest this month as the front-month/second-month gasoline swap spread on the back of prompt physical tightness in the market, following the refinery turnaround season in the region.
The October/November gasoline spread swap was assessed at $25.50/mt Thursday, up from $21.50/mt the previous day.
That is nearly double last year's backwardation. On September 25, 2013 the same October/November spread spread was assessed at $13.50/mt.
"I think there is a real lack of product -- there are a few refineries down and planned to be down," said a gasoline trading source with reference to European supply. "The market does feel a little dry."
The European spread tracked a similar structure in NYMEX RBOB futures, where the spread between the October and November contracts was assessed at 18 cents/gallon at 16:30 London time.
The market structure reflected strength in the physical, where prices for FOB Rotterdam Eurobob barges have recently rallied.
EBOB barges were assessed at $900.50/mt on Thursday, up by $12.50/mt on the day.
