Trade Ideas: Propane, Gasoline, Crude

This week’s trade idea takes a different format from previous weeks. Today’s edition brings you trades in propane, gasoline and crude.

Firstly, we take a short-positioned view of the front American Mont Belvieu LST propane. LST propane has seen a stellar performance over the past week, supported by a smaller-than-expected build in US propane inventories. However, we now anticipate bearish times for the contract due to a likely significant build in inventories. Supporting this view, we saw LST bids hit in the physical in yesterday’s European window alongside more muted buying in the LST versus Asian FEI propane arb.

Our second idea of the week comes from regional differences in gasoline. We expect bullishness in the gasoline east/west arb due to a continuation of anticipated weakness in European gasoline. We see players stopping out of length in EBOB alongside a shift towards net-long positioning in the gasoline east/west in the front, supporting this view.

Our final idea of the week is to sell Brent/Dubai, which recently rallied to one-month highs due to renewed strength in the North Sea physical and selling in Dubai by Chinese majors. However, we believe this rally is overdone and that there is a good risk: a reward on the downside.

We discuss these three trade ideas in detail in our weekly Onyx Alpha report. For further information on where you can access this report, kindly contact our sales team: