Middle distillate strength set to move East as ICE GO and HO find somewhat of a ceiling in coming weeks
Commentary summary:
- Reverse TA diesel arbs start to move and AG/WCI diesel and jet points West both to Europe and the US.
- HO and jet spreads and cracks improve whilst ICE GO remains flat and Singapore diesel declines.
- Asian middle distillate loaders able to transit the Suez safely once more.
- HO and NWE jet spreads and cracks to find a ceiling whilst ICE GO should continue to decline. Singapore diesel cracks and spreads should find a floor very soon.
As noted in last week’s commentary “With increased flows of North Asian diesel (due to improving arb margins into Singapore) and AG/WCI middle distillates set to continue to flow to the Singapore market, further declines in diesel and jet cracks and spreads seem likely in the short to medium term.”
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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