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Gasoil Backwardation Soften As Refineries Gradually Return

OIL PRODUCTS

Gasoil backwardation has eased since last week as French refineries gradually return after worker strikes and as French fuel supplies recover.

  • The prompt Gasoil spread fell from a peak of 95$/mt on Oct 31 to 40$/mt earlier today but has since recovered slightly. A possible strike at BP’s Rotterdam refinery could add to the tight supplies in Europe.
  • The longer dated Dec22-Dec23 spread is also softer than levels seen for much of October but remains at historically high levels. Concern for Russian supplies of crude and refined products following EU sanctions are giving wider market support amid low distillate stock levels.
    • Gasoil NOV 22 up 0.3% at 1057.75$/mt
    • Gasoil NOV 22-DEC 22 up 0.25$/mt at 42.25$/mt
    • Gasoil DEC 22-JAN 23 down -0.5$/mt at 22.5$/mt
    • Gasoil DEC 22-DEC 23 up 4.5$/mt at 178.75$/mt

Source: Bloomberg

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