DIESEL: Prompt Diesel Spread At Highest Since April Suggesting Tight Market

Near term ICE Gasoil backwardation is the steepest since April 2024 suggesting market tightness supported by US sanctions on Russia announced in January and lower EU imports last month.

• The prompt ICE Gasoil time spread has risen from around $4/mt in early Feb to a high of $13.25/mt on Friday.
• However, the Jun25-Dec25 spread is today around $14.75/bbl and holding rangebound this month since easing back from a peak of $27.5/mt on Jan. 13.
• The Gasoil-Brent spread is holding just below the highest since July 2024 seen at just over $20/bbl on Jan. 17.
• Europe’s diesel imports fell by over 200kb/d m/m in January to 650kb/d amid lower arrivals from the US and India, Bloomberg said on Feb. 14.
• US distillate stocks were last week 10.8% below the five year average, Singapore Middle Distillates inventories were 2.2% above normal while European ARA Gasoil stocks were 16.8% above normal.
• The planned European spring refinery maintenance season is looking light, according to IIR. CDU capacity outages at European refineries between Feb. 1 and May 31 are expected at the lowest since at least 2020 at 800kbpd.
  • Gasoil MAR 25 unchanged at 714.5$/mt
  • ULSD MAR 25 down 0.5% at 2.45$/gal
  • Gasoil MAR 25-APR 25 down 0.75$/mt at 11.75$/mt
  • Gasoil JUN 25-DEC 25 down 1.5$/mt at 14.75$/mt
  • EU Gasoil-Brent down 0.5$/bbl at 19.2$/bbl
  • US ULSD crack down 0.2$/bbl at 31.86$/bbl