Gasoil Regains Ground Back to Near Flat on the Week

Gasoil futures and time spreads regain ground after softening earlier in the week amid demand uncertainty and signs of the start of a recovery in US refinery utilisation.

• The prompt Gasoil spread remains net down on the week although the Jun24-Dec24 spread has seen a small net gain. The prompt Gasoil time spread has recovered from a low of 17.25$/mt on Feb 29 back up to 23.25$/mt (3.12$/bbl) today compared to the prompt Brent spread of 0.86$/bbl.
• Gasoil backwardation remains steeper than crude markets with tighter supplies amid a greater impact from Red Sea diversions on oil distillates flows rather than crude. Over 20% of oil tanker trade was diverting around Africa amid the Bab el-Mandeb strait disruption but almost 50% of total diesel flows were avoiding the Red Sea according to Wood Mackenzie last week.
• The latest weekly EIA oil data showed a drop in distillates implied demand on the week in line with the seasonal trend. US refinery utilisation remains low but showed signs of recovery with a 0.9% increase to 81.5%.
• A potential drop in Russian diesel exports from key western ports by 11% in March from February amid lower crude processing rates is also supportive of global diesel markets.
• Data this week showed an increase in European ARA Gasoil stocks but still 8.9% below the five year average. Singapore Middle Distillates inventories increase to just 4.55% below average while US distillate stocks remain 9.6% below normal.
  • Gasoil MAR 24 up 1.7% at 841$/mt
  • ULSD APR 24 up 1.4% at 2.69$/gal
  • Gasoil MAR 24-APR 24 up 3.25$/mt at 23.75$/mt
  • Gasoil JUN 24-DEC 24 up 4$/mt at 34.5$/mt
  • EU Gasoil-Brent up 0.1$/bbl at 24.07$/bbl
  • US ULSD crack down 0$/bbl at 33.16$/bbl