Sell-off in ICE gasoil spreads and E/W paves the way for Sikka-Rotterdam jet arb
- ICE gasoil prompt spreads have fallen sharply this week with the Sep/Oct currently at $41/mt down from almost $70/mt at close on Friday.
- E/W has also fallen (albeit to a lesser degree) to $75/mt, down from $70/mt, over the same period.
- Weaker CPP freight rates globally (including TC20) amid talks of a deal regarding the Strait of Hormuz are also helping the arb.
- The net result is that arbitrage economics for bringing jet cargoes from Sikka to Rotterdam are much improved for October landing.
- Current arb margins show around $56/mt in value for an LR2 via Cape, up sharply from $30/mt at the end of last week.
- On top of this, rumours of stronger Chinese exports in August could also add to the short-term pressure on E/W.
(Sikka to Rotterdam [LR2 via Cape] jet fuel arbitrage economics improving)
About the Author
Jay Maroo | Head of Product Experts, Sparta Commodities
Jay Maroo is the Head of Product Experts at Sparta Commodities covering cross-barrel global analysis. Having previously held senior roles at Brevan Howard and Vortexa, Jay is experienced in oil & shipping markets research and building analytics capabilities across global teams.
About Sparta
Founded in 2020, Sparta made waves in the commodity analytics space in March 2022 when it secured a $6m series A investment from Singular. This success then later snowballed into a further $17.5 million in a series A funding round led by the technology venture capital firm FirstMark, with participation from existing shareholder, Singular.
The platform, created by former traders Miles Moseley and Felipe Elink Schuurman, is designed to answer a common problem shared by most traders: 90% of pricing data required to make trading decisions is kept in silos and shared manually by voice, email, or chat.
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