RBOB correction in full swing as tariffs impact delayed for a month at least

Commentary summary:

• The last-minute delay to impending US tariffs on Canada and Mexico sends RBOB into correction mode, with EBOB left looking overpriced for the rest of the quarter.

• We would expect EBOB, and by consequence also the TA Arb and E/W to correct over the coming days. With prompt EBOB in backwardation. (killing new storage opportunities) and arb opportunities out of ARA also now closed, the European market has lost its justification for greater relative strength.

• The recovery in Sg92 spreads and cracks we foresaw has now run its course, with the post-tariff delay selloff now also impacting the Singapore market.

Starting with the biggest discrepancies between what the market is used to seeing and what the market is currently pricing, Singapore remains open into WAF and the majority of the rest of the Atlantic Basin is currently best serviced out of Houston rather than ARA.

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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