Volatile naphtha market faces a changing arbitrage outlook and strong gasoline support

• Europe shifts focus to U.S. blending grades, opening arbitrage to US markets and boosting physical premiums
• Arbitrage to Asia worsens as FOB premiums rise in EU and E/W trades lower, while US faces stronger freight rates
• Diminishing risk premium from the Middle East conflict mirrors the current market levels
• Despite the latest correction, gasoline’s strong rebound has pushed gas-naphtha spreads to a two-month high

The naphtha market remains volatile but supported, with a mixed perspective. The petrochemical market has weakened as arbitrage to Asia closes, but the strong rise in gasoline is stimulating the market in the Atlantic Basin.

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.

Sparta is a live, market intelligence and forecasting platform that enables oil traders, refiners, banks, hedge funds and wholesalers to have access to real-time and global actionable insights to capture market opportunities before others.

To find out how Sparta can allow you to make smarter trading decisions, faster, contact us for a demonstration at sales@spartacommodites.com