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DIESEL: Decline in Houthi Attacks Would be Bearish for Diesel: FGE

DIESEL
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A decline in Houthi attacks in the Red Sea will be bearish for diesel due to a potential drop in freight rates, according to FGE cited by Bloomberg.

  • “Among the potential returning tonnage is that which in 2024 has carried anywhere from 0.8-1.5m b/d of middle distillate flow to the West around the Cape of Good Hope.”
  • The journey reduction would improve the competitiveness of Eastern gasoil/diesel in Europe.
  • An increase in Eastern flows to Europe could be bearish for USGC refiners.  The US refiners have been clearing significant excess gasoil/diesel barrels in NW Europe.
  • The cautious approach from shipping on resuming passage through the Red Sea is expected to continue in the coming weeks.
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A decline in Houthi attacks in the Red Sea will be bearish for diesel due to a potential drop in freight rates, according to FGE cited by Bloomberg.

  • “Among the potential returning tonnage is that which in 2024 has carried anywhere from 0.8-1.5m b/d of middle distillate flow to the West around the Cape of Good Hope.”
  • The journey reduction would improve the competitiveness of Eastern gasoil/diesel in Europe.
  • An increase in Eastern flows to Europe could be bearish for USGC refiners.  The US refiners have been clearing significant excess gasoil/diesel barrels in NW Europe.
  • The cautious approach from shipping on resuming passage through the Red Sea is expected to continue in the coming weeks.