Gasoline crack rebounds

European jet fuel premiums fell to the lowest level in more than six months as Glencore International Plc sold on the barge market.

European gasoline’s premium to Brent crude, or crack, rebounded from a six-week low. Gasoil on the ICE Futures Europe exchange traded in backwardation for a second day.

Light Products

The front-month gasoline crack rose for the first time in six days, rebounding to $6.01 a barrel as of 5:01 p.m. London time, according to PVM Oil Associates Ltd. data on Bloomberg. It fell to $5.70 a barrel earlier, the lowest level since June 27.

Gasoline for immediate loading in northwest Europe traded from $980 to $982 a metric ton, according to a Bloomberg survey of traders and brokers monitoring the Argus Bulletin Board and the Platts pricing window. Deals for the Eurobob grade fuel, to which ethanol is added, were done from $967 to $997 a ton at the end of last week.

Premium grade traded from $996 to $999 a ton. Barge lots are for no more than 5,000 tons.

Jet fuel barges traded at a premium of $74 to August gasoil on ICE, the survey showed. That compares with an $80 premium on Aug. 4 and marks the lowest level since Jan. 21.

Morgan Stanley was today’s only buyer on the barge market, the survey showed.

Gasoil for August delivery dropped $12.25, or 1.3 percent, to $900.25 a ton on ICE as of 4:52 p.m. local time. That contract traded at 50 cents more than September, keeping the market in backwardation.

Futures are described as being in backwardation when the contract closest to expiry costs more than later-dated contracts. This structure usually signals rising demand or reduced supply. The opposite structure is known as contango.

Long, or bullish managed-money bets on gasoil futures and options were at 63,745 contracts last week, according to ICE data published today on its website. That’s up 13 percent from last week.

Diesel barges traded at premiums from $23 to $25 to August ICE futures, the survey showed. That’s little changed on last week. Gasoil barges were also steady, with one deal done at a discount of $1.50 to the August contract.

Residues

Low-sulfur fuel oil, used to power ships and generate electricity, traded from $632 to $648 a ton, the survey showed. High-sulfur fuel oil, a shipping fuel, traded from $611 to $612 a ton.