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GASOLINE: European Cracks Support with Economics Competitive to East and West

GASOLINE
BulletEnergy BulletsCommodities

Cracks could find some support, particularly in European blending and the EBOB complex, driven by the rebound in arbitrage from Europe to the US, according to Sparta Commodities.

  • European economics are now clearly the most competitive both in the East and West with Europe the cheapest option for multiple destinations such as Kenya, Indonesia, Singapore and Australia.
  • Blending margins for both E5 and E10 in Europe remain negative, limiting local demand, while the “margin for blending and arbitraging RBOB from Europe to US also remains negative.”
  • US gasoline inventories are below historical average after a declined for six of the last seven weeks driving an increase in the trans-Atlantic arb and an improvement in the economics for blending and arbitrage from Europe.
  • Global refinery should now trim with weak margins down at these levels.
  • Weak margins coinciding with the start of refinery maintenance season should pressure the crude structure over the next week.
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Cracks could find some support, particularly in European blending and the EBOB complex, driven by the rebound in arbitrage from Europe to the US, according to Sparta Commodities.

  • European economics are now clearly the most competitive both in the East and West with Europe the cheapest option for multiple destinations such as Kenya, Indonesia, Singapore and Australia.
  • Blending margins for both E5 and E10 in Europe remain negative, limiting local demand, while the “margin for blending and arbitraging RBOB from Europe to US also remains negative.”
  • US gasoline inventories are below historical average after a declined for six of the last seven weeks driving an increase in the trans-Atlantic arb and an improvement in the economics for blending and arbitrage from Europe.
  • Global refinery should now trim with weak margins down at these levels.
  • Weak margins coinciding with the start of refinery maintenance season should pressure the crude structure over the next week.