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Gasoil Backwardation Steeper Than Brent Despite Falling Spreads

OIL PRODUCTS

Near term Gasoil curve backwardation has eased significantly this week but tight supplies, low stocks and uncertainty over Russia crude and product supplies maintain a steeper forward curve than for crude.

  • European ARA Gasoil stocks were yesterday reported as still 26.5% below the five year average according to Insights Global data
  • Gasoil is in steeper backwardation despite the rally in crude spreads following the move to ease some covid restriction by China.
  • The Gasoil Jan23-Feb23 spread is currently at 23.23$/mt equivalent to 3.12$/bbl compared to the Brent crude spread of 1.69$/bbl. The Gasoil Jun23-De23 spreads is at 56.75$/mt (7.62$/bbl) compared to 4.83$/bbl for Brent.
    • Brent JAN 23-FEB 23 up 0.11$/bbl at 1.69$/bbl
    • Brent JUN 23-DEC 23 up 0.34$/bbl at 4.82$/bbl
    • Brent DEC 23-DEC 24 up 0.4$/bbl at 6.09$/bbl
    • Gasoil JAN 23-FEB 23 up 1.75$/mt at 23.5$/mt
    • Gasoil DEC 23-DEC 24 up 4.75$/mt at 56.75$/mt
    • Gasoil DEC 23-DEC 24 up 3.25$/mt at 64.5$/mt

Source: Bloomberg

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Near term Gasoil curve backwardation has eased significantly this week but tight supplies, low stocks and uncertainty over Russia crude and product supplies maintain a steeper forward curve than for crude.

  • European ARA Gasoil stocks were yesterday reported as still 26.5% below the five year average according to Insights Global data
  • Gasoil is in steeper backwardation despite the rally in crude spreads following the move to ease some covid restriction by China.
  • The Gasoil Jan23-Feb23 spread is currently at 23.23$/mt equivalent to 3.12$/bbl compared to the Brent crude spread of 1.69$/bbl. The Gasoil Jun23-De23 spreads is at 56.75$/mt (7.62$/bbl) compared to 4.83$/bbl for Brent.
    • Brent JAN 23-FEB 23 up 0.11$/bbl at 1.69$/bbl
    • Brent JUN 23-DEC 23 up 0.34$/bbl at 4.82$/bbl
    • Brent DEC 23-DEC 24 up 0.4$/bbl at 6.09$/bbl
    • Gasoil JAN 23-FEB 23 up 1.75$/mt at 23.5$/mt
    • Gasoil DEC 23-DEC 24 up 4.75$/mt at 56.75$/mt
    • Gasoil DEC 23-DEC 24 up 3.25$/mt at 64.5$/mt