The past fortnight has seen a continuation of EBOB’s bull run, with the prompt crack rallying to levels flirting with $15.50/bbl. In this period, we witnessed significant buying from trade houses and refiners alongside smaller selling by funds towards the end of the fortnight. The prompt gasoline E/W registered a fortnight of two halves with prices first rallying from -$0.80/bbl on Jan 18 to +$0.05/bbl on Jan 25, but eventually plummeting to around -$1.50/bbl on Feb 05. This weakness in the E/W perhaps emerged from the remarkable strength clocked in by EBOB. The prompt TA arb continued to weaken into the past two weeks because of EBOB’s strength alongside heavy selling from refiners and trade houses. Notwithstanding this, trade houses flipped to buying the arb into the beginning of Feb. The Mar gasnaph witnessed a significant rally with prices hovering above the $160/mt mark on Feb 06. Considering that the contract saw its usual sell-side flows through the fortnight, this rise in prices was also likely a function of gasoline, in particular EBOB’s strength relative to the NWE naphtha contract.
