EU and US diesel (and jet) appears bullish at least in the short term, whilst a bearish argument can be more easily constructed for Asian middle distillates
Commentary Summary:
– US and Asian diesel and jet arbs remain largely closed into Europe whilst North Asian and AG/WCI jet arbs appear open into Singapore.
– ICE GO, HO and EU jet pricing exhibit gains whilst Asian diesel and jet spreads find a ceiling.
– The HOGO and GO E/W exhibit quite dramatic widening.
– Russia’s Black Sea port of Tuapse has suspended fuel exports, and its refinery halted crude processing after Ukrainian drone attacks on November 2.
– We remain cautiously bullish EU and US diesel and jet in the short term, cogniszant that much of the recent strength is headline driven. A more bearish argument can be constructed for East Asian middle distillates.
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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