Impending turnarounds in EU and Asia appear to be turning the situation bullish currently

Commentary summary:

• USGC TA diesel arbs close and point to Latin America whilst AG/WCI diesel points East as AG/WCI jet points West.

• Global middle distillate cracks and spreads continue to decline over the last week apart from the front ICE GO spread and NWE jet spreads.

• The possibly failing ceasefire in the Middle East threatens to again reduce or stop Suez routed arbs.

• Turnarounds, in particular in East Asia, but also the EU to help global middle distillate pricing to find a floor and moderate a rebound in the coming weeks. When East Asia starts to come out of turnarounds should be the time to get short again.

Last week we wrote “This suggests that the downward trend in Singapore diesel and jet cracks and spreads will likely persist until Asia-Pacific refinery turnarounds peak at the end of April.”

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.