With closed arbs to Europe and decreasing refining margins in the East, we maintain a bullish view on middle distillates into the medium term

Commentary summary:

• USGC TA diesel and jet arb closes, whilst AG/WCI diesel continues to point East whilst AG/WCI jet points West but also to the USWC.

• Global middle distillate spreads and cracks all exhibit gains, or find a floor, over the past week apart from Singapore middle distillate cracks.

• US attacks Houthi targets on multiple occasions over the last week which in turn has led to increased fears about Suez routings for product carrying vessels.

• We maintain a bullish view on middle distillate, largely until East Asian turnarounds end. However, possible increases in Chinese middle distillate exports will be important to monitor.

Singapore diesel and jet fuel markets have begun to stabilise, with spreads finding a floor and edging higher in recent days.

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.