Diesel strengthens greatly into ICE GO’s expiry, but with so many open arbs, surely a ceiling will be hit after that!
Commentary summary:
• Unprecedented European diesel pricing increase leads to open diesel (and jet) arbs into Europe from the USGC and Asia (AG/WCI and in the case of jet East Asia).
• Ahead of expiry on Thursday this week, the ICE GO front spread has been at times on Wednesday over $95 /mt.
• Houthis restarts vessel attacks in the Red Sea, the first since December.
• With so many open arbs into the US and Europe and strong refining margins, the case to short August cracks and Aug/Sep spreads becomes powerful.
James Noel-Beswick is Commodity Owner for Sparta. Before joining Sparta, James worked as an analyst for likes of BP and Shell and leads our continued development of the distillate product vertical.
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