Diesel Spreads Steady After Falling to Lowest Since July

The European Gasoil curve backwardation has softened throughout October with spreads yesterday falling to the narrowest since July although seeing small gains today. Diesel cracks have also fallen since a peak on 16 Oct but remain relatively robust compared to historical levels amid low stocks and tight supplies ahead of the winter heating season.

• Front-month time spreads for diesel in Asia have also narrowed on signs of weaker demand in Europe with a weaker outlook due to softer consumption in Germany and France according to Bloomberg sources.
• Supplies from Asian refiners such as Reliance and BPCL are expected to increase with the return of facilities from planned maintenance.

• Data last week showed US distillate stocks 13.1% below the five year average, European ARA Gasoil stocks 25.9% below and Singapore Middle Distillates inventories 18.2% below average.

• The Gasoil 2-3 month spread has fallen from over 40$/mt at the start of October to just 12$/mt today. The Dec23-Dec24 yesterday fell to the lowest since 27 July at 68.5$/mt but remains strong compared to levels seen in H1 2023.
  • Gasoil NOV 23 up 1.6% at 879.5$/mt
  • ULSD DEC 23 up 1.6% at 2.93$/gal
  • Gasoil NOV 23-DEC 23 up 1.25$/mt at 29$/mt
  • Gasoil DEC 23-DEC 24 up 6$/mt at 68.75$/mt
  • EU Gasoil-Brent up 1.1$/bbl at 25.91$/bbl
  • US ULSD crack up 1$/bbl at 40.23$/bbl