Sept bullish, Q4 bearish from here

Commentary summary:

• Some upside looks to remain potentially for the September ICE Gasoil contract, with slammed shut USGC arbs and arrivals from the EoS slowing from the end of this month

• The upside is likely to be relatively short-lived, however, with swing arbs out of the AG/WCI all pointing West since about the turn of the month, for arrivals in late September onwards

• The HOGO is in a delicate balancing act currently. Whilst there is some short-term uplift potential for ICE Gasoil, persistently low inventories in PADDs 1 & 2 are offering support on top of the BP Whiting outage and the imminent turnaround season in the US

• The East looks to have found a floor for now. Indian supply seems to be strong, despite issues around the situation at the Vadinar refinery, with prompt cash diffs falling consistently in line with Sg10 spreads in recent weeks.

• Chinese exports have been reportedly high, but any dip here could offer support. The fact that the swing AG/WCI arbs have been pointing West (and continue to do so) should also now offer some further support to the Sg10 complex as we head towards turnarounds in the East as well.

Neil Crosby is an experienced energy market and commodity analyst, specialising in crude oil, oil products, biofuels, and carbon. With roles at OilX and JBC Energy, he has extensive expertise in global oil industry analysis, forecasting tools, bespoke research, and client communication. His focus on refining and petrochemicals underscores his specialisation.