Non-oxy gasoline Ice derivatives liquidity deepens

Market: Oil products
13/06/23

Liquidity in Eurobob non-oxy gasoline instruments listed by the Intercontinental Exchange (Ice) has deepened this month, with the European market moving steadily towards higher-ethanol product at the pump.

A 30,000t spread trade for Argus Eurobob non-oxy vs Argus Eurobob oxy occurred on 12 June, following a 15,000t trade on 9 June and a 25,000t lot a day earlier, to raise open interest outstanding on this contract by more than 40pc to 231,000t. Also on 8 June a 25,000t block trade was registered with Ice for the July 2023 Argus Eurobob non-oxy futures contract, taking open interest up by more than 60pc to 66,000t.

Eurobob non-oxy is an unfinished gasoline blendstock, which following the addition of up to 10pc ethanol meets the E10 pump specification. Benchmark Eurobob oxy is the unfinished blendstock for E5 fuel, which has a 5pc ethanol content. The former's share of the European gasoline market is growing, because its higher bioethanol content helps meet increasing greenhouse gas (GHG) emissions cut quotas. Argus estimates E10 demand now accounts for around 50pc of overall European gasoline consumption.

Trade in the physical Eurobob gasoline barge market has begun to reflect this, and a monthly record of Eurobob non-oxy traded in May. Non-oxy trade accounted for 50pc of the total in the 12 months up to and including May 2023, double that of the previous year.

In response to shifting physical trade Argus will, from January 2024, move its Eurobob oxy assessment away from being assessed as a volume weighted average of trade to being assessed as a differential to the Eurobob non-oxy price. But the shift has been slower in paper markets — open interest on Argus Eurobob oxy futures contracts listed by Ice still far outweigh that of non-oxy, with more than 10mn t of outstanding open interest on the outright-value Ice futures contract alone.

Market participants expect this balance to change substantively in the months ahead, as the transition in physical markets continues to gather pace.

In addition to Ice, the CME also lists a range of futures contracts listing both Argus oxy and non-oxy futures.

By Andrew Bonnington and Robert Harvey

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

05/05/25

Mexico's manufacturing contraction deepens in April

Mexico City, 5 May (Argus) — Activity in Mexico's manufacturing sector shrank for a 13th straight month in April, with declines accelerating in production and new orders, according to a survey of purchasing managers. The manufacturing purchasing managers' index (PMI) fell to 45.5 in April from 46.9 in March, finance executives' association IMEF said, moving further below the 50-point threshold that separates growth from contraction. US tariffs imposed since March are adding pressure to Mexico's manufacturing sector, which makes up about a fifth of the national economy. The auto industry, responsible for roughly 18pc of manufacturing GDP, may be the hardest hit by the new measures, including a 25pc tariff on auto parts that took effect 3 May. Mexico remains the top exporter of vehicles to the US, supplying 23pc of all US auto imports in 2024. But IMEF said tariffs compound broader, mostly domestic headwinds, including reduced public spending and investor uncertainty stemming from sweeping legal and regulatory reforms. New investment has stalled since late 2024. The PMI index for new orders fell by 2.5 points to 41.8, the lowest since June 2020. Production dropped by 2.5 points to 43.6, while employment fell by 0.6 point to 46.4. New orders and production have now been in contraction for 14 straight months, and employment for 15. Inventories saw the steepest drop in April, falling 4 points to 46.3 — sliding from expansion to contraction — as manufacturers accelerated shipments after tariff implementation dates were confirmed. IMEF's non-manufacturing PMI — which covers services and commerce — remained in contraction for a fifth consecutive month but edged up by 0.5 points to 49.0 in April. Within that index, new orders rose by 0.6 points to 48.1, employment increased 1.3 points to 48.6 and production held steady at 47.5. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

Alcmene withdraws ExxonMobil Miro shares offer

05/05/25

News

05/05/25

Alcmene withdraws ExxonMobil Miro shares offer

Hamburg, 5 May (Argus) — Austrian company Alcmene has withdrawn from its plans to buy ExxonMobil's share in German refining joint venture Miro. Alcmene told ExxonMobil of the withdrawal on 29 April, putting an end to a drawn-out sales process. ExxonMobil agreed in October 2023 to sell its 25pc stake in Miro, which operates the 310,000 b/d Karlsruhe refinery in Germany. The sale was initially put on hold by a court order following a petition by fellow shareholder Shell in April 2024. The court in Karlsruhe dismissed ExxonMobil's appeal in the final instance in July, prohibiting the company from selling its stakes without prior agreement by Shell. Shell holds 32.25pc in the venture, Russian state-controlled Rosneft has 24pc and US firm Phillips 66 has 18.75pc. Rosneft's German business has been under state trusteeship since September 2022. Rosneft plans to sell all of its German assets. By Natalie Müller and Fenella Rhodes Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Sunoco to buy Canadian fuel distributor Parkland:Update

05/05/25

News

05/05/25

Sunoco to buy Canadian fuel distributor Parkland:Update

Adds details on proxy fight, other background. Houston, 5 May (Argus) — US infrastructure operator and fuel distributor Sunoco said it will buy Canadian refiner and fuel retailer Parkland in a $9.1bn cash and stock deal. The deal comes as Parkland faces a proxy fight from its largest shareholder Simpson Oil, which was calling for a vote to change the board of directors at a now-cancelled 6 May shareholder meeting. The agreement with Sunoco "creates significant financial benefits for shareholders and would position the combined company as the largest independent fuel distributor in the Americas," said Michael Jennings, executive chairman of Parkland. The transaction will further diversify Sunoco's portfolio and geographic footprint and increase cash flow generation for reinvestment and distribution growth, Sunoco and Parkland said. Parkland owns about 4,000 retail and commercial locations in Canada, the US and the Caribbean region, as well as the 55,000 b/d refinery in Burnaby, British Columbia. The refinery produces conventional oil products and has 4,000 b/d of co-processing capacity, meaning both petroleum and biogenic feedstocks are used. Sunoco said it is committed to continue investment in the refinery which supplies fuel to southwestern BC, including the Vancouver area. Under the deal, Sunoco will keep a Canadian headquarters in Calgary and "significant employment levels" in Canada, the companies said. The transaction is expected to close in the second half of the year. Sunoco is part of the Dallas-based Energy Transfer family of companies but is publicly traded under its own ticker symbol. Parkland has planned a special meeting of its shareholders on 24 June, to approve the transaction. The annual general meeting of Parkland shareholders, which was originally scheduled for 6 May has been cancelled. Proxy fight building before deal Parkland in March said it was conducting a review of strategic alternatives including a possible sale of the company. The review was led by a special committee of the board of directors. Parkland long-time chief executive Bob Espey announced on 16 April that he would step down sometime this year with the timing depending on the completion of the strategic review or the appointment of a new chief executive. Simpson Oil, which holds about 20pc of Parkland shares, called for a strategic review of Parkland in 2024 and re-iterated its concerns in a letter to the Parkland board of directors in February. Parkland and Simpson Oil have been mired in a dispute related to a 2019 governance agreement. Simpson Oil said on 2 May that it had the support of more than 60pc of Parkland's shareholders which would enable it to take control of the Parkland board of directors. An official vote would have taken place at the now-cancelled shareholders meeting. Simpson Oil on Monday urged Parkland to "respect the democratic process" and allow the 6 May shareholders meeting to proceed as scheduled. "Delaying the meeting and pushing forward with any transaction ahead of board transition represents a clear breach of fiduciary duty—an obvious attempt to cling to power and sidestep shareholder will," Simpson Oil said in a press release. Simpson Oil also called for all 11 incumbent directors to resign immediately. In 2023, activist investor hedge fund Engine Capital said that Parkland should consider shedding assets "that create unnecessary complexity and detract from its underlying value." Engine Capital said at the time that the Burnaby refinery is a "volatile and more capital-intensive refinery" that should be sold or spun off. Parkland last year sold its Canadian commercial propane business to Avenir Energy for C$115mn. Sunoco, meanwhile, has been growing its footprint in North America. The company [last year acquired] (https://direct.argusmedia.com/newsandanalysis/article/2530270) pipeline and terminal operator NuStar Energy for $7.3bn. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Sunoco to buy Canadian fuel distributor Parkland

05/05/25

News

05/05/25

Sunoco to buy Canadian fuel distributor Parkland

Houston, 5 May (Argus) — US firm Sunoco agreed to buy Canadian fuel distributor and retailer Parkland in a deal valued at $9.1bn, the companies said Monday. Sunoco, an energy infrastructure and fuel distribution company, will acquire all outstanding shares of Parkland in a cash and equity transaction. This deal "creates significant financial benefits for shareholders and would position the combined company as the largest independent fuel distributor in the Americas," said Michael Jennings, executive chairman of Parkland. The transaction will further diversify Sunoco's portfolio and geographic footprint and increase cash flow generation for reinvestment and distribution growth, the companies said. Parkland owns a 55,000 b/d refinery in Burnaby, British Columbia, which produces conventional oil products and has 4,000 b/d of co-processing capacity, meaning both petroleum and biogenic feedstocks are used. Sunoco said it is committed to continue investment in the refinery which supplies fuel to southwestern BC, including the Vancouver area. Parkland owns about 4,000 retail and commercial locations in Canada, the US and the Caribbean region. Under the deal, Sunoco will keep a Canadian headquarters in Calgary and "significant employment levels" in Canada, the companies said. The transaction is expected to close in the second half of the year. Parkland has planned a special meeting of its shareholders on 24 June, to approve the transaction. The annual general meeting of Parkland shareholders, which was originally scheduled for 6 May has been cancelled. Parkland in March said it was conducting a review of strategic alternatives including a possible sale of the company. The review was led by a special committee of the board of directors. Parkland last year sold its Canadian commercial propane business to Avenir Energy for C$115mn. By Eunice Bridges Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

California refinery closures panic politicians

05/05/25

News

05/05/25

California refinery closures panic politicians

Houston, 5 May (Argus) — California could lose up to 17pc of its refining capacity within a year, triggering major concerns about its tightly supplied and frequently volatile products market. US independent Valero announced on 16 April that it will shut or repurpose its 145,000 b/d Benicia refinery near San Francisco by April 2026. The firm is also evaluating strategic alternatives for its 85,000 b/d Wilmington refinery in Los Angeles. And independent Phillips 66 said in October that it would shut its 139,000 b/d Los Angeles refinery in the fourth quarter of this year. Valero's Benicia announcement brought a quick reaction from state officials. Governor Gavin Newsom on 21 April urged regulators at the California Energy Commission (CEC) to work closely with refiners through "high-level, immediate engagement" to make sure Californians have access to transport fuels. He has ordered them to recommend by 1 July any changes to California's approach that are needed to ensure adequate fuel supply during its energy transition. The message appears to have hit home. The CEC delayed a vote on new refinery resupply rules to provide time for additional feedback and consultation with stakeholders after the Valero announcement. The CEC also plans to introduce a rule this year for minimum inventory requirements at refineries in the state as well as possible rules on setting a refiner margin cap. The new rules are part of an effort by Newsom to mitigate fuel price volatility in California, including the signing of two pieces of legislation known as AB X2-1 and SB X1-2. Refiners have been unhappy with the state's regulatory and enforcement environment for some time. It is "the most stringent and difficult" in North America owing to 20 years of policies pursuing a move away from fossil fuels, Valero chief executive Lane Riggs says. The long and short of it Refinery closures are fuelling long and short-term supply concerns in California. The most immediate is an anticipated supply crunch at the end of this summer. Phillips 66's plan to shut the Los Angeles refinery by October will deal a significant blow to the state's refining capacity and is likely to occur at a time when Californian gasoline prices are most prone to volatility. The US west coast is an isolated market, many weeks sailing time from alternative supply sources in east Asia or the US Gulf coast. California's strict product specifications further limit who can step in when refinery output falls. The state sometimes sees price spikes in late summer and early autumn because the switch from summer gasoline blends leaves local inventories low while in-state refineries adjust to producing winter grades. California gasoline prices spiked in September 2022 when stocks fell to a nine-year low on the west coast. Spot deliveries hit a record $2.45/USG premium to Nymex Rbob futures in the Los Angeles market at the time (see graph). Production problems at several refineries in southern California led to another spot price surge in September 2023. The California Air Resources Board (Carb) permitted an earlier switch to cheaper winter gasoline production in response to both events. Refinery closures will force California to rely on imports in the longer term, leaving the state exposed to stretched supply lines. State regulators' proposed solutions have raised eyebrows. The CEC's Transportation Fuels Assessment report in August last year included a policy option in which California would buy and own refineries, which the state is not pursuing. Another option involves state-owned products reserves to allow rapid deployment of fuel when needed. The CEC and Carb regulators will also release a draft transportation fuels transition plan later this year. By Eunice Bridges and Jasmine Davis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more