Gasoline markets take a bullish turn as we head towards the holidays
Commentary summary:
– Global gasoline markets are showing bullish trends, with strength emerging in the US and Asia, while the European market is being influenced by developments from both East and West.
– Chinese gasoline exports are expected to remain low into 2025, driving up premiums for semi-finished grades from India, Korea, and Taiwan, and creating tightness in the East.
– The European gasoline market is experiencing narrower octane spreads and lower high-octane component premiums, with E10 blend margins approaching parity with EBOB swap prices, potentially signaling a ceiling for the current gas-nap rally.
– ARA exports are looking to move East, providing a healthy floor and potentially some upside from here even for the EBOB complex.
The picture for global gasoline markets has taken a decidedly bullish turn over the last week or so, with strength emerging in both the US and Asia, with the European market being pulled up by developments to both the East and West.
Whilst the recent rally in RBOB spreads came off slightly yesterday, it is still holding on to much of the recent run-up on the back of PADD-1 inventories which have gone from being significantly above the recent seasonal average at the beginning of October to essentially in-line with 2022/2023 levels in the latest readings.
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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