Gas-nap extends further but bullish impetus for EBOB more difficult to find

Commentary summary:

• EBOB spreads failed to move higher alongside RBOB and Sg92 spreads as the E10 blend margin opened on wider gas-nap despite continued softness from physical premiums.

• Stronger RBOB spreads in particular feels premature, with plenty of incentive recently to see volumes moving TA and refinery capacity returning online in PADD-1.

• In the East, weaker Dubai has given AG barrels a potential outlet into the Atlantic Basin with landed values closing in on competitiveness into WAF and Brazil. Softer EBOB suggests E/W should recover again soon.

• Overall we continue to see a lack of bullish signals available for prompt Atlantic Basin gasoline markets, with news of outages and issues at Dangote and Donges so far not supporting the market higher. Fallout from power outages in Spain and Portugal are yet to be seen.

Gas-nap continues to push higher in Europe despite a lack of additional outlets for finished gasoline and continued softness in high octane physical premiums in particular.

The naphtha market itself should not be under a great amount of pressure currently, with petchem margins still workable and Skikda supply expected lower in the short-term.

Naphtha qualities more suitable for gasoline blending continue to trade at higher premiums, albeit only at or below their recent seasonal average levels.

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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