2025: What’s in store for gasoline markets?

Commentary Summary:

– Continued capacity ramp-ups in the West (Dangote/Dos Bocas) are likely to be outweighed by shutdowns in and around pricing centres.

– Middle Eastern and Indian capacity additions should help offset some of the expected supply shortfall from weaker Chinese exports, but raises the first bearish risk if Chinese exports return.

– 2024 has been a solid year for gasoline demand globally with consumer spending recovering and lower pump prices. Continued vehicle fleet switching in Europe will remain supportive, with demand growth still looking robust in the East of Suez (ex-China).

– Forward EBOB is looking particularly strong into 2025. A narrow paper TA arb, a forward E/W at record negative levels for a prior December, and a wide summer 2025 gas-nap are all pointing to expectations of a tight European gasoline market.

Talk at the beginning of the year of major Atlantic Basin disruption from capacity additions in Nigeria and Mexico proved overdone, with neither able yet to consistently displace traditional arbitrage barrels into those regions.

Jorge Molinero is a Commodity Owner at Sparta. Starting his career as a financial analyst with BBVA, Jorge quickly transitioned to market intelligence within the energy sector, spending 4 years as a naphtha analyst with Repsol before joining Sparta in early 2023.

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