European naphtha gains momentum amid short term gasoline strength

30 January 2025 Time to read:  minutes

 

 

Commentary summary:


• The sharp drop in TC6 has supported intra-European flows recently, keeping product within the region.

• European naphtha is benefiting from a healthy gasoline market, especially after a short-term Dangote RFCC leak.

• E/W spread saw a sharp $8/mt drop in the prompt while back of the curve inches above $20/mt.

• Freight markets are closely watching the possibility of Suez reopening, which could alter arbitrage economics and E/W levels.

The naphtha market has maintained an upward trajectory since mid-January. Although timespreads have experienced some fluctuations, cracks continue to rise, especially in Asia, where the gasoline crack is also strengthening significantly, improving the outlook for weak refining margins.

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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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