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DIESEL
Near term European Gasoil time spreads are extending the recent decline to return to contango this week suggesting ample supplies are arriving at Europe.
- The prompt ICE Gasoil time spread has fallen from a high of +$4.75/mt on June 20 back to a low of -$1/bbl today.
- FGE suggest a shift in refining yields away from gasoline is contributing to the move.
- The conversion of Suezmaxes and VLCCs to carry gasoil and jet fuel mainly from the Middle East and India's west coast could also be helping to alleviate Asia's supply glut and limiting NW Europe diesel price gains.
- One VLCC carrying CPP is already heading to Europe while another is currently loading, according to Blomberg. At least another five VLCCs are expected to switch to CPP, according to Braemar.
- The longer term Dec24-Dec25 time spread is however holding onto most of the gains seen during June at around $34.35/mt today and near the highest since April.
- Gasoil JUL 24 up 0.3% at 798.5$/mt
- ULSD AUG 24 down 0.9% at 2.61$/gal
- Gasoil JUL 24-AUG 24 unchanged at -0.5$/mt
- Gasoil DEC 24-DEC 25 up 0.25$/mt at 34.25$/mt
- EU Gasoil-Brent down 0.3$/bbl at 20.5$/bbl
- US ULSD crack down 0.4$/bbl at 26.34$/bbl
Source: Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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