European market loses momentum despite the Asia pull being stronger

Commentary summary:

• Fundamentals are more pressured by lower gasoline cracks and seasonally softer petrochemical demand in the region.

• European timespreads have corrected by $3/mt over the past two weeks, but remain in backwardation.

• Asia remains firmly supported, with strong MOPJ structure and rising physical premiums for early-2026 arrivals.

• The E/W and E/W box keep printing fresh highs as Europe weakens and Asia absorbs more Western barrels.

The wide arbitrage margins to the East are no longer enough to sustain the strength of the European market in the physical naphtha market.

The decline in NWE northern premiums has also spread to the paper market, with the timespreads correcting sharply downward, now accumulating a loss of $3/mt over the past two weeks for the Dec/Jan contract.

Jorge Molinero is Commodity Owner for Gasoline 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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