Tightness unwinding slowly but the market remains on edge

Commentary summary:

• EBOB, but RBOB even more so, starting to see support fading. The rollercoaster of distillate cracks – following in part the fortunes/expectations of a potential Ukraine peace deal – continues to weigh on the gasoline market.

• Whilst Dec gas-nap has proven relatively resilient, Jan/Feb RBOB Future spreads in particular are barreling towards parity as crude intake returns in the US.

• The relative performance of EBOB vs RBOB continues to puzzle, however. The TA Arb (net RVO) remains around the -14.5cpg mark, heavily favouring USGC barrels in the Atlantic Basin arb competitive ranking and negating any potential TA resupply into PADD-1.

• The market in the East is continuing to pick up pockets of support from unexpected refinery outages. Those Prefchem RFCCs are still offline, and there are mixed reports on plans for Chinese export volumes in December.

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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