Record seasonal width of the GO E/W contributes to workable Middle East diesel and jet West combined with open USGC MR arbs into Europe

Commentary summary:

• USGC MR ULSD and AG/WCI LR2 diesel and jet arbs workable into Europe. Whilst North Asian diesel and jet arbs remain open into Singapore.

• Global diesel spreads and cracks continue their gains over the last week with cracks at their highest seasonal level since 2022.

• Threats from sanctions and Ukrainian attacks to Russian diesel supply remain key factors underpinning global strength.

• Increasing supply, decreasing demand and strong refining margins; is December an inflection point for diesel pricing?

December Singapore diesel and kerosene cracks and spreads have extended their gains, although with sharp day-to-day swings in response to a flurry of fresh sanctions and attacks.

The European Union and the United States both tightened their measures against Russia over the past week/fortnight, whilst Ukrainian drone strikes on Russian refineries disrupted production and reignited fears of supply shortfalls.

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.