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GASOLINE: Gasoline Cracks Seek Support Amid Soft Physical Market: Sparta

GASOLINE
BulletEnergy BulletsCommodities

Gasoline cracks and spreads are searching for support as the physical market softens, according to Sparta Commodities.

  • Cracks have been lower than the previous three years this winter, but constructive relative to pre-pandemic levels.
  • “A very workable contango in both EBOB and RBOB markets allowed participants to keep physical markets relatively tight, but they will pay for that in April and May.”
  • The East of Suez market is supported by strong demand in India and lower gasoline exports from China, although this support could be turning slightly.
  • Mid-March onwards suggests a floor for EBOB relative to other regions, although prompt arbs are difficult to judge due to the timings of specification changes.
  • PPAC data earlier this month showed gasoline consumption in India increased by 6.7% year-on-year in January to 3.31m metric tons.
  • China’s refined oil exports fell 17.45% y/y to 2.46m mt in January, according to OilChem citing shipping fixtures, due to poorer export margins, which even turned negative for gasoline.
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Gasoline cracks and spreads are searching for support as the physical market softens, according to Sparta Commodities.

  • Cracks have been lower than the previous three years this winter, but constructive relative to pre-pandemic levels.
  • “A very workable contango in both EBOB and RBOB markets allowed participants to keep physical markets relatively tight, but they will pay for that in April and May.”
  • The East of Suez market is supported by strong demand in India and lower gasoline exports from China, although this support could be turning slightly.
  • Mid-March onwards suggests a floor for EBOB relative to other regions, although prompt arbs are difficult to judge due to the timings of specification changes.
  • PPAC data earlier this month showed gasoline consumption in India increased by 6.7% year-on-year in January to 3.31m metric tons.
  • China’s refined oil exports fell 17.45% y/y to 2.46m mt in January, according to OilChem citing shipping fixtures, due to poorer export margins, which even turned negative for gasoline.