Gasoil Backwardation Edges Up From Earlier Lows

Gasoil time spreads are starting to see some support due to ongoing tight supplies after easing lower in the last couple of days amid a wider market selloff with focus on future oil demand growth. Diesel markets are weighing the impact of the Russian fuel export ban against recent high Asian exports and economic concerns from central back rates potentially staying higher for longer.

• Diesel markets are still seeing stronger backwardation than crude markets with refinery maintenance and the Russian export ban limiting the ability to boost inventories ahead of the winter season.
• China’s strong diesel exports are not expected to last as refiners are unlikely to receive a fourth batch of export quotas according to Vortexa.
• The prompt Gasoil spread dipped to 28.5$/mt (3.83$/bbl) earlier today but remains above the lows from last week and well above start of September levels of below 15$/mt. The Dec23-Dec24 spread is gaining back to 105.5$/mt (14.2$/bb) from a low earlier today of 93.25$/mt.
• The prompt Brent spread is at 1.5$/bbl with Dec23-Dec24 at 8.4$/bbl.
  • Gasoil OCT 23 down -1% at 960.5$/mt
  • ULSD NOV 23 down -1% at 3.19$/gal
  • Gasoil OCT 23-NOV 23 down -3.5$/mt at 30.75$/mt
  • Gasoil DEC 23-DEC 24 down -5.5$/mt at 104$/mt
  • EU Gasoil-Brent down -1.2$/bbl at 29.43$/bbl
  • US ULSD crack down -1.6$/bbl at 45.08$/bbl