The strength in East Asian middle distillates is notable but ICE GO and HO should weaken from here

Commentary summary:

• USGC TA diesel arb workable but AG/WCI diesel increasingly points East.

• ICE GO and HO spreads and cracks largely flat whilst Singapore middle distillate spreads improve over the last week.

• Continuing changes to US and Chinese tariff arrangements causes continuing doubts in the global economy.

• Largely neutral to bearish on ICE GO and HO whilst some strength to run in East Asia.

The bullish sentiment expressed in last week’s commentary “While the potential inflow of additional AG/WCI diesel may bring some measure of relief, it is the tightening backdrop of East Asian refinery maintenance that remains the overriding market force.

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.