Northwest European gasoline refinery margins advanced sharply on Friday, climbing $8.49 to reach $30.59 a barrel - their highest reading since August 2023 - even as benchmark oil prices moved lower.
Market activity in the physical gasoline market was pronounced. In the Argus trading window, 24,000 metric tons of E5 gasoline barges changed hands. Sellers in that block included BP (NYSE:BP), Shell (NYSE:SHEL), Gunvor and Equinor, with TotalEnergies (NYSE:TTE) identified as the buyer.
Additional trading comprised 8,000 tons of E10 gasoline barges. In that tranche, Shell and Sahara sold cargoes that went to TotalEnergies, Exxon (NYSE:XOM) and Trafigura.
Flows and availability were also affected by a planned maintenance outage. TotalEnergies’ Donges refinery was taken offline on April 27 for a scheduled two-month maintenance stop. The facility is France’s second-largest refinery, accounts for roughly 20% of the country’s crude refining capacity and has an annual crude refining capability of about 11 million tons.
Across the Atlantic, U.S. retail gasoline prices were elevated. California motorists were paying $6 a gallon on Thursday, the highest state-level pump price in two years as the region moved toward the summer driving season.
On the policy front, the Trump administration said it was exploring the option of lending energy companies up to 92.5 million barrels of crude from the Strategic Petroleum Reserve in an effort to steady oil market conditions.
Key points
- Northwest European gasoline margins rose $8.49 to $30.59 a barrel, their highest since August 2023 - impacts refining and trading desks.
- Heavy barge trading: 24,000 metric tons of E5 and 8,000 tons of E10 gasoline changed hands, with major energy firms both selling and buying cargoes.
- TotalEnergies’ Donges refinery outage removes a significant portion of France’s refining throughput, while U.S. pump prices in California reached $6 a gallon ahead of summer.
Risks and uncertainties
- Refinery outages - such as the two-month maintenance at Donges - can tighten regional product supply and influence refining margins; this affects the refining and downstream oil sectors.
- Elevated U.S. retail gasoline prices in California introduce demand-side pressure on consumers and could influence transport and retail sectors ahead of peak driving season.
- Policy actions involving the Strategic Petroleum Reserve, including potential loans of up to 92.5 million barrels, add uncertainty to crude supply expectations and may affect oil market volatility and trading.