Overview
Summary
The gasoline complex continues to see a strong performance over the fortnight as cracks demonstrated counterseasonal strength, rolling up to the M1 levels seen over August. This week, the Oct’25 EBOB crack surpassed $16/bbl, with trade houses continuing to add length. They are comfortably in the money, and profit-taking flows may hinder further upside. Bullish sentiment has been buoyed by the extended maintenance at Dangote’s 200kb/d RFCC, as well as unplanned outages, including Shell’s Pernis refinery. US gasoline stocks continue to dwindle, and seasonal levels are slightly lower than last year’s.
Differentials
The Oct’25 gasoline East/West spread dropped sharply to -$4/bbl, where it has since consolidated, indicating that Singapore has largely matched European strength lately. The TA arb saw a substantial decline, with Oct’25 falling from 3c to -2.50c/gal over the fortnight, highlighting the relative strength in Europe. EBOB strength lifted the Oct’25 gasnaph above $120/mt, although strength in naphtha has limited the upside.
Open Interest
Open interest in the gasoline complex has generally increased over the fortnight. Notably, market risk is concentrated in the Q2’26 tenors for the Sing 92 crack and the TA arb. Meanwhile, OI in the Oct’25 Sing 92 crack declined over the fortnight, with levels falling below the 5-year average.
Freight
M1 TC5 (from the Middle East to Japan) freight registered an 8% decline from $37 to $34/mt since 8 Sep. Meanwhile, the M1 TC2 (Continental Europe to the US Atlantic Coast) rose into the $19/mt region.
