Reduced PADD1 crude runs, a closed USGC TA arb and Middle Eastern arbs still pointing East lead us to remain bullish ICE GO despite refinery returns
Commentary summary:
– Despite increased US crude runs, the USGC TA arb remains closed.
– HOGO shows first signs of narrowing and a similar fashion the GO E/W shows first signs of widening again.
– The signs are that Russian refiners are returning from turnarounds whilst South Korean refinery runs also increase.
– Generally, we are remaining bullish ICE GO and perhaps HO spreads. With the Singapore regrade declining, we become more bearish on Western jet.
Global diesel cracks and spreads have maintained their upward trajectory since the start of the quarter, despite a brief dip earlier this week, which has since recovered.
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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