Dangote return puts another roadblock in the way of EBOB reaching summer strength

Commentary summary:

• Very prompt RBOB arb has opened for ARA blenders on the back of a sharp move higher in the TA Arb as EBOB feels the weight of a returning Dangote

• EBOB relative to Sg92 has also weakened, shutting down the borderline opportunities that had been emerging for Singapore-origin barrels to point to WAF

• The Singapore market continues to move from strength to strength, however. This should have a ceiling before long though as maintenance moves past its seasonal peak and refining margins remain strong

• The persistent relative weakness in reformate, alkylate, and other high octane components in ARA compared to recent years mirrors lower gas-nap spreads, and points to a looser octane market expected for the summer ahead than we’ve seen in recent years

Cracks and spreads – especially on EBOB – have responded poorly today to news that the Dangote refinery looks to be back up and running sooner than expected and has potentially deferred a planned maintenance cycle to later in the year.

Philip Jones-Lux is Senior Analyst for Sparta. Having worked with organisations such as JBC Energy and RP Global, Philip is a seasoned energy market analyst with expertise across the oil barrel and power markets

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