Further signs of Asian strength slowing, but stronger US high-octane component premia keeping European outlook looking healthy

Commentary summary:

– European market is more supported compared to previous weeks, with a variety of export options to both the West and East of Suez.

– E/W spread corrects, reaching negative values for February contracts and beyond.

– Short-term export options to Latam are opening up from Europe, due to rising blending costs in US market.

– Singapore has become the cheapest alternative for January deliveries into Mexico, potentially shifting market dynamics and supporting the E/W spread.

This week in the gasoline market, we have seen bullish sentiment shift to Western markets. The European market has been more supported compared to previous weeks due to a multitude of export options both to the West and East of Suez.

This has resulted in a decline in the E/W spread over recent sessions, reaching negative values for February contracts and beyond.

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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