Eastern opportunities rise and Sing 92 complex points to strengthen amid favourable arbitrage conditions

Commentary summary:

• Arbitrage opportunities from Singapore and AG to traditionally Western-supplied outlets have increased on the back of low E/W Levels.

• Singapore remains the cheapest source for Ecuador deliveries, with a strong discount into Mexico’s West Coast versus USGC alternative.

• U.S. inventories remain low, especially in PADD 5, and could tighten the market if stocks are not replenished before summer.

• ARA to PADD 1 arbitrage remains slightly closed but may improve if runs do not meet expectations in the US.

EBOB timespreads and cracks found a ceiling after the strong upward trend that had been building since mid-April. With blending component premiums stuck at seasonally low levels and a strongly rebounding gas-nap spread, the option to blend and sell E10 locally remains viable, as we pointed out last week, which limits short-term upside in the EBOB complex.

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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