Gasoil Decline Suggests Europe Coping Without Russian Diesel

Gasoil time spreads are pulling back with the Jun23-Dec23 earlier today trading to the lowest since early December. The spread is down nearly 5$/mt today and has declined from over 50$/mt on 27 Jan down to around 22$/mt.

• The near term spreads are also weak with the Gasoil 1-2 spread falling from 48.5$/mt in late Jan to near parity today.
• The falling spreads suggest that Europe is coping for supplies despite the missing Russian products following the sanctions which started on 5 Feb. In the first week following the new Russian sanctions European ARA Gasoil stocks increased to remain above the five year average. Stocks have been boosted by supplies from Middle East, US, and China.
• Downside pressure has also come from mild weather reducing the need for diesel in heating and power generation.
  • Gasoil MAR 23 down -3.3% at 792.75$/mt
  • Gasoil MAR 23-APR 23 down -2.25$/mt at 2.5$/mt
  • Gasoil JUN 23-DEC 23 down -4.75$/mt at 22$/mt
  • Gasoil DEC 23-DEC 24 down -4$/mt at 37.5$/mt