Trade in non-oxygenated gasoline blendstocks has hit record highs in Europe as the roll-out and uptake of E10 gasoline in the continent continues.
Finished gasoline in Europe contains either 5% or 10% ethanol, known as E5 or E10. But ethanol is only blended in close to the final sales point to avoid contamination and stability issues. Refiners must produce two kinds of petroleum-derived gasoline blends to accept the different levels of ethanol.
The first, Eurobob oxy, contains oxygenating blending components and can accept up to 5% ethanol while still meeting European finished gasoline specifications. Eurobob oxy is also the European industry’s pricing benchmark.
The other, Eurobob non-oxy, is typically devoid of oxygenates and is suitable to accept up to 10% ethanol. Eurobob non-oxy trade in the fob Amsterdam-Rotterdam-Antwerp physical barge market has been rising in recent years as the roll-out of E10 continues.
The rise in Eurobob non-oxy trade has followed the increased demand for E10. Argus assessed a record 178,000t of non-oxy gasoline trade in October, up from 50,000t a year earlier. That compares with reported trade of 48,000t on the oxy gasoline benchmark in October, the lowest monthly figure on record, down from just under 315,000t in October 2021 and a monthly traded average of 250,000t last year. Trade in non-oxy gasoline barges only exceeded that of the oxy gasoline market during one month before 2022, but the phenomenon has occurred each month this year since May, except in August.
Margins for gasoline in Europe have enjoyed a counter-seasonal boost this autum, averaging premiums to crude of almost $18/bl since the start of October. French refinery strikes and seasonal refinery maintenance trimmed supplies and lent support, but premiums to crude have started to turn south as those same refineries now lift output, and will do so even further heading into 2023 as Europe seeks to fully replace volumes of Russian diesel once EU sanctions take full effect from February.
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