European gasoline under pressure as USGC export position strengthens
Commentary summary:
- TC14 sharp correction improves Houston-to-East Atlantic arbitrage.
- European gasoline faces pressure on reduced export outlets in both sides of Suez.
- US gasoline stocks in PADD 3 remain at seasonal lows, tightening the US market and pushing for a TA rebound.
- E/W gains $1.5/bbl as Singapore and AG export outlook improves.
The global gasoline market corrected downwards in both cracks and spreads after reaching a ceiling in the current upward trend.
On the fundamentals side, US gasoline stocks continue to mark seasonal lows in PADD 3, leaving a tighter balance in the US market.
At the same time, the sharp correction in TC14 has lowered the cost of arbitrage from Houston to outlets in the Atlantic basin, making it cheaper into LATAM and Nigeria, reducing export opportunities from Europe and adding pressure to the EBOB complex, which is expected to trade lower in the coming weeks.
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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