Light Ends
Market Overview
Mogas: Backwardation hinders long haul routes
Global gasoline markets, particularly EBOB, remain highly backwardated as finished grades remain remarkably tight as summer concludes.
Into the wider Americas, Houston continues to land at discount as backwardation keeps products from long haul routes and tight high octane components prices out European exporters into all but Brazil.
High octane components are tight globally, with Europe being the epicenter. This has closed arbitrage opportunities to New York for the winter season.
Mogas: Seasonality weakens Americas heavy naphtha
As US gasoline specifications change to winter grades following 15 September, heavy naphtha has begun to weaken due to higher RVP allowed in the winter spec.
Light sour grades have sold off in Houston as petchem cracking margins remain globally weak.
While blender margins in Houston remain closed for local gasoline grades, excess heavy and light naphtha supply looks set to allow Houston exporters to increase finished gasoline supply into lower-octane demand regions such as Brazil.
Arbitrage opportunities to the Far East for heavy spec remain workable.
