Widening E/W spread reshuffles global gasoline flows

Commentary summary:

• Blending margins tighten in Europe on lower gas-nap and rising blending components.

• Europe regains export competitiveness into LATAM amid E/W surge.

• RBOB arbitrage margin from Europe collapses on higher blending cost and higherr freight costs.

• Strong US refining margins and high crude runs points to reducing import demand from ARA in the short term.

The E/W gasoline spread rebounded strongly during the week, gaining $1/bbl in the prompt and strengthening across the entire forward curve, reflecting support in the Singapore 92 complex driven by ample arbitrage opportunities to the West.

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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