RBOB under pressure as TA Arb opens while EBOB maintains share of Latin America

Commentary summary:

• RBOB: Bearish prompt TA Arb
• EBOB: Bullish prompt EBOB spreads
• Sing 92: Constructive Gas E/W

RBOB:

Despite the EIA reporting extremely low gasoline stocks, US RBOB spreads remain unchanged week over week as global gasoline trade flows impact the NYH market.

Late last week, the transatlantic arbitrage opened for ARA blenders as paper TA arb rallied +5 cpg along with gains in gas-nap prices due largely to demand destruction in Asian petrochemical margins for naphtha.

This has allowed for cheaper blending costs within ARA, as naphtha appears more widely available. Concurrently, the backwardation seen within the RBOB market driven in large part by draws due to the continuing supply shock and increasing seasonal demand strength have all contributed.

This is a notable shift, as imports have sat at multi-year lows for the entirety of 2026. Over the coming weeks, increasing volumes of blending components into NYH should be expected.

Notably, the USGC continues to be priced out of preference across much of Latin America, as regional blends in Europe remain competitive.

Houston refinery margins for A-Grade have become workable, as blend costs likewise remain low, driven largely by the aforementioned soft petrochemical margins. However, this suggests Houston will need to offer at a discount in order to displace European-origin product into Latin America.

EBOB:

The weakening in underlying naphtha prices has allowed ARA gasoline export barrels to become highly competitive globally, displacing Houston-origin product from markets it traditionally dominates. Notably, cheaper components have allowed E5/E10 blend margins to open.

However, given the profit potential in the export market, domestic blending appears largely immaterial, with the transatlantic arb workable at certain levels, exporters are more likely to move a single 27kt cargo than sell multiple smaller 2kt cargoes into the domestic market.

Given the opening of the transatlantic arbitrage, open blend margins in Houston for A-Grade, and a lack of outlets for US supply, selling the prompt TA arb appears to be a highly reflective trade of current market fundamentals.

Underlying risks keep me from being too bearish on outright RBOB spreads, but bullish outright EBOB spreads positioning likewise appears to be a highly reflective trade for current market conditions.

SING 92:

The gas E/W spread for June has fallen to near-record lows as the Eastern market has become well supplied, driven by increasing imports following the initial supply shock, regional demand destruction in both gasoline and naphtha, and market chatter of increasing exports from China.

Singapore 92 finds itself in direct competition with EBOB, as both compete for outlets traditionally dominated by Arabian Gulf origins, notably Southeast Asia and Australian shorts.

Singapore has retained its displacement of Houston-origin product into Pacific Coast Latin America. This does suggest a degree of constructive upside potential for both the East/West and Singapore 92 spreads.

About the Author
Nikolas Plonski, our Oil Market Analyst for the Americas at Sparta, brings experience as a trader from Gent Commodity USA trading diesel and jet paper markets. Nikolas then joined Sparta, where he serves as a cross barrel analyst focused on the Americas.
Connect: https://www.linkedin.com/in/nikolasplonski/

About Sparta
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