NWE gasoline backwardation steepens to month high, nearly double last year

London (Platts)--26Sep2014/952 am EDT/1352 GMT

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.

--Francesco Di Salvo, francesco.disalvo@platts.com
--Edited by Alisdair Bowles, alisdair.bowles@platts.com

http://www.platts.com/latest-news/oil/london/nwe-gasoline-backwardation-steepens-to-month-21293439