Arbitrage openings and gasoline recovery fuel naphtha strength, but the Q2 does not look as promising

Commentary summary:

• LR2 arbitrage via the Cape of Good Hope now offers better margins than MR flows to Europe from the Med.

• MOPJ prompt crack turned positive, with April and May contracts potentially following.

• GC light sour arbitrage to both Europe and Asia became more competitive as weakened against MOPJ and Nap NWE.

• Broader macroeconomic risks may weigh on gasoline and petrochemical demand, capping further gains.

The naphtha market rebounded strongly over the past week, surpassing the previous levels reached in February for Q2 timespreads in both the European and Asian markets.

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.

Sparta is a live, market intelligence and forecasting platform that enables oil traders, refiners, banks, hedge funds and wholesalers to have access to real-time and global actionable insights to capture market opportunities before others.

To find out how Sparta can allow you to make smarter trading decisions, faster, contact us for a demonstration at sales@spartacommodites.com