With Asian and European runs under pressure, the positive outlook for distillate seems probable to continue for rest of the year

Commentary summary:

– USGC diesel arb margins to Europe continue to decline whilst TC14 increased, closing the USGC jet arb to Europe. Also, Middle Eastern diesel and jet arbs continue to point East.

– All global diesel and jet cracks and spreads exhibit gains this week. The jet and GO E/W continue to narrow whilst the HOGO widens.

– October Russian diesel exports are the lowest for over a year.

– Whilst European, Middle Eastern and Russian refineries returning from turnarounds is sure to have a tempering effect, with strong runs only really evident in the US, the bullishness in distillate to continue for most of the remainder of 2024.

This week global diesel and jet cracks and spreads have continued their ascent since late September.

Singapore’s diesel market has largely mirrored this trend, though signs of softening in the spread have emerged in the last few days, likely due to anticipated increase in distillate shipments from the Middle East.

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.