London — The Mediterranean gasoline market weakened to a 10-month low versus thefront-month Mediterranean swap Wednesday as cargoes were offered lower asoversupply lingered in the region.
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The FOB Mediterranean gasoline cargo market was assessed at $623.75/mtWednesday, down $12.50/mt on the day and assessed at a $7.75/mt discount tothe March Mediterranean gasoline swap, down from a $4.25/mt discount Tuesday.
This represents the lowest value versus the front-month swap since March17, 2017, when the FOB Med gasoline cargo was assessed at a $11.50/mt discountto April swap, S&P Global Platts data shows.
"There is a lot of oxy grade gasoline around...there is too much productversus the current spot demand," a trader said, adding that a narrowerMed/North differential would reduce the incentive to bring gasoline from theAmsterdam-Rotterdam-Antwerp hub to the Mediterranean.
The front-month Med/North gasoline differential -- the spread between thefront-month FOB Med 10 ppm cargo swap and the equivalent FOB Rotterdam Eurobobbarge swap -- widened 75 cents/mt to a three-week high of $7.75/mt Wednesday. Overall, little fresh trading activity has been reported in theMediterranean gasoline market this week amid lackluster spot demand in theregion and closed arbitrage routes to the US and the Persian Gulf.
"The arbitrage is shut to the Persian Gulf, that never helps," a anothertrader said.
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