In this episode of Sparta Market Outlook, host Felipe and guests Neil Crosby, Philip Jones-Lux, and Jorge Molinero discuss key takeaways from the APPEC conference, highlighting bearish crude sentiments amid perceived gluts, offset by geopolitical tensions and tight product markets. They explore refining constraints, product strength in naphtha, gasoline, and distillates, while questioning the timing of supply overhangs and the role of China’s SPR builds, providing a nuanced view on flat prices, spreads, and trading positions for the coming quarters.

• Geopolitical risks loom large, from Middle East strikes to NATO responses, potentially bolstering oil prices despite bearish balances.


• APPEC buzz centers on an impending crude glut, but low OECD stocks and OPEC export realities challenge the consensus.


• Refining capacity shortages could sustain tight product markets, even as crude supply appears ample.


• NAFTA and gasoline show rally potential, with east-west arbitrages and turnaround impacts in focus.


• Distillates and crude spreads like Brent-Dubai and WTI-Brent signal evolving dynamics worth watching.

Chapters

(01:57 ) Introduction and APPEC Overview

Felipe welcomes the team and kicks off with APPEC highlights, touching on bearish crude views and geopolitical undercurrents shaping market sentiment.

(06:23 ) Challenging the Crude Glut Narrative

Exploring why bearish supply-demand outlooks haven't materialized, with insights on OECD stocks, OPEC exports, and refining bottlenecks driving product tightness.

(14:02 ) China’s SPR Builds and Dubai Strength

Unpacking China’s strategic petroleum reserve activity and its role in supporting Dubai benchmarks amid open arbitrages.

(19:23 ) Naphtha Market Outlook

Jorge breaks down NAFTA’s strong rally, turnaround impacts, and long-term visions for positive cracks driven by Asian petrochemical demand.

(23:30 ) Gasoline Dynamics and Arbitrages

Analyzing gasoline strength in Europe and Singapore, with early signs of rally caps from shifting east-west flows and blending margins.

(33:57 ) Crude Spreads: Brent-Dubai and WTI-Brent

Neil assesses overvalued Dubai and WTI’s marginal role, questioning if spreads signal a deeper glut amid seasonal pressures.