Episode 40: Tariff relief & summer ramp-up; where does oil go from here?

In this episode of the Sparta Market Outlook Podcast, the team dives into the recent oil market rebound spurred by a 90-day US-China tariff reprieve, analyzing its impact on light ends, crude, and middle distillates. They explore how LPG and naphtha markets are stabilising, the bearish pressures on gasoline despite open arbitrages, and a cautiously bullish outlook on crude driven by tightening US stocks and OPEC dynamics. The discussion also covers middle distillates, noting a tactical rebound in diesel and jet fuel amid shifting global flows, while emphasizing the need to monitor fundamentals for potential volatility as trade negotiations unfold.

📚 Chapters: 

(01:46) US-China Tariff Reprieve: Market Impacts

Felipe and the team unpack the 90-day tariff pause, highlighting its immediate boost to flat prices and the rebound in LPG, with propane prices spiking 8% in the East.

(09:07) Light Ends: LPG and Naphtha Dynamics

Jorge discusses the stabilization of LPG markets and a bearish shift on naphtha, driven by returning Mediterranean refineries and weaker petrochemical margins.

(10:49) Gasoline Markets: Bearish Signals Persist

The team explores the bearish outlook on EBOB and RBOB, with open arbitrages failing to clear inventories and physical markets lagging paper trends.

(21:35) Crude Outlook: Bullish Fundamentals Emerge

Neil shares a bullish view on crude, citing early US stock draws, strong Chinese imports, and skepticism about OPEC’s supply hikes, with a focus on Brent and Dubai spreads.

(29:09) Middle Distillates: Tactical Rebound in Diesel and Jet

James analyzes the short-term strength in diesel and jet fuel, driven by low US stocks and shut arbitrages, but warns of a bearish medium-term outlook as global runs increase.

(35:56) Market Calls and Wrap-Up

The team summarizes their trading views, including bearish naphtha time spreads, bullish Brent spreads, and tactical buys in June ice gas oil and heating oil.