Narrowing TA Arb and Gas-Nap spread combine to put a damper on EBOB outlook

Commentary summary:

• April TA Arb (and gas-nap) narrow, hurting ARA origin export econs for April-loading onwards

• RBOB arb from ARA now almost closed for blenders, worsening the forward picture for drawing down ARA components vs last week

• Singapore market wobbled as Atlantic Basin sentiment creeped Eastward and news emerged of potentially higher Chinese utilisation and exports

• Tariffs remain the big potential mover for Atlantic Basin markets in particular in the weeks ahead, and maybe recent EBOB weakness has been partly driven by an element of speculative bearishness in anticipation of potential tariffs on the EU

A combination of a narrowing TA Arb (as RBOB settles from the tariff-related upside earlier in the month), a rising TC2, and a narrowing gas-nap have narrowed the opportunity for prompt RBOB barrels to move out of ARA across the Atlantic.

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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