Light Ends
Market Overview
MOGAS
This tightness is translating into EBOB strength as landed values into LATAM still remain favourable as the latter region pulls cargoes in amid a lack of availability from AG.
The Atlantic Basin gasoline market is tight with a lack of incoming supply from the east of Suez and European turnaround season looming.
An open TA Arb for much of October is also supportive prompt EBOB spreads.
Low Rhine water levels, though improving, also continue to be a factor, limiting the flow of components from inland to the ARA blending hub - E5 Blending margins strength support this.
Naphtha
The outlook is bullish given our view on strong EBOB spreads in the short term and naphtha set to weaken on expectations of increased Red Sea supply in the coming months.
Gas-Nap has also reached record seasonal highs in prompt swap values, fundamentally on the strength of European supply constraints.
However given recent strength in E/W naphtha, there is the possibility of the arb opening via Cape to Asia. This would boost European naphtha prices, thereby capping the Gas-Nap rally.
