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The factor — the relationship of gasoline blendstock MTBE to spot Eurobob barges price — was assessed at 1.279 on Friday, the highest at this point in the year since 2016. That came on the back of the factor jumping to a two month high of 1.245 last week Monday.
Usually the MTBE factor makes a slow start to the year and picks up just ahead of the spring gasoline specification change from winter to summer grade.
The high factor was driven by firm buying interest in the Amsterdam-Rotterdam-Antwerp hub. Higher MTBE prices in the US Gulf have supported the increase. The price differential between the ARA MTBE market and US Gulf was over $60/mt on Friday, meaning that the arbitrage is open on paper.
A 15,000-mt MTBE cargo from Rotterdam to USG heard fixed at low-$30/mt by a shipbroker but was not corroborated by other sources.
“I heard that demand is good for oxygenated gasoline blends towards the Persian Gulf,” a trader said. The strong demand seen for both duty paid (T2) and unpaid (T1) MTBE was indicative of export appetite, the blender added.
The MTBE factor is calculated by dividing the MTBE spot price by the EBOB gasoline spot price. The MTBE price was assessed at $735.50/mt FOB ARA Monday with EBOB at $575/mt. MTBE premium to EBOB gasoline front-month swap last calculated at $163/mt on Monday.”
US Gulf Coast spot MTBE prices fell 0.42 cents day on day on Friday to 223.05 cents/gal FOB USG (around $791.83/mt), with the USG/ARA arb narrowing by 2.95 cents to 17.37 cents/gal (around $61.66/mt).