Signal Brief: Jet goes stratospheric; record Jet E/W dislocation shocks distillates

Distillate Signal Brief: Jet goes stratospheric; record Jet E/W dislocation shocks distillates

• The last 24 hours have seen stratospheric moves in global jet pricing, across Asian and European regrades, as well as kerosene/jet cracks and spreads.
• The impact on East Asian jet has far exceeded that on diesel, creating a remarkable dislocation between April Jet E/W and April GO E/W.
• The April Jet E/W has surged to almost unbelievable highs, while the April GO E/W remains negative, despite narrowing sharply over the same period.
  
  
• Several factors are driving the extreme move:
  (i) The large market impact from the loss of AG exports.
  (ii) Jet’s limited production flexibility — it can essentially only be produced directly from crude refining runs, making run cuts due to crude shortages especially impactful.
  (iii) Minimal storage capability and low levels of SPR, with jet fuel difficult logistically to store long-term.
  (iv) Potential uncovered airline positions, as carriers face both longer routes and tightening global supply.

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