Europe Gasoline-Falls below $600 on low export hopes

LONDON, July 6 (Reuters) - European gasoline prices fell below $600 a tonne on Monday, pressured by lower exports to the United States and the Middle East and a drop in crude futures. Prices were down about 2.5 percent to around $585 a tonne, with news Saudia Arabia's imports, most of which come from Europe, are expected to fall by 40 percent in July. Brokers said lower demand out of the Middle East was adding to concerns created by lacklustre domestic consumption and rising inventories of the motor fuel in the United States. "Gasoline needs a pick-up from the U.S. inventory numbers later this week, otherwise we're going to see European prices continue to fall," one broker said. On the swaps market, European gasoline barges flipped back into contango -- with July prices trading at a discount to August, suggesting the balance in Europe between supply and demand is not particulary tight. PRICES * Premium unleaded 10ppm gasoline barges traded at $582-$586 a tonne fob ARA, the lowest level since mid-May. Prices closed around $600 a tonne on Friday. * The dealing was relatively thin, with about 7,000 tonnes changing hands throughout the day. Vitol was the most active buyer, with Gunvor the main seller. * The drop in the Eurograde gasoline barge prices was not as severe as in crude oil, pushing its crack to dated Brent up slightly to $6.25 a barrel from $6.10 on Friday. However, the crack is only a third of its level from mid-June. * Brent crude futures were trading down $1.23 at $64.38 a barrel by 1636 GMT. * U.S. RBOB gasoline futures were trading down more than 4 cents at $1.7405 a gallon. SWAPS * Gasoline swaps also fell sharply. The balance of July was $594 a tonne, but the spread between July and August turned positive with the later month trading at $596.50 a tonne. * The rest of the curve remains in backwardation with September trading at $592.50 and October at $574 a tonne. * Cracks rose to $6.15 a barrel from $5.25. INVENTORIES * The increase in U.S. gasoline inventories last week was likely to limit arbitrage export opportunities from Europe, traders said. * Data released on Tuesday and Wednesday on the state of U.S. fuel inventories will be watched closely to see if stocks of gasoline are continuing their upward trend. EXPORTS/IMPORTS * Brokers put the potential profits for European traders to export to the United States at around $5.50 a tonne for July. * Saudi Arabia is expected to import 40 percent less gasoline in July than in recent months as more domestic refining capacity comes online. NAPHTHA * One naphtha deal was done in the afternoon trading window, with Shell buying a cargo from Gunvor at $570 a tonne for delivery between July 15-19. * Brokers said demand for naphtha was picking up, supported by arbitrage opportunities to the U.S. and restocking by petrochemical firms. * The spread between naphtha and gasoline in Europe is at its lowest level since March. (Reporting by David Sheppard; Editing by James Jukwey) (([e-mail]; [phone])) For latest physical prices double click on: , and. For energy speed guide page click on. For ARA oilstock data click on For European oilstock data click on For swaps prices double click on: gasoline naphtha HS fuel oil LS fuel oil Keywords: MARKETS EUROPE GASOLINE (Xtra clients: Click on http://topnews.session.rservices.com to see Top News pages in multimedia Web format.) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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