Sparta in action: How Sparta called the NWE jet downside early

How Sparta called the NWE jet downside early

In early February, European jet pricing was already softening.

But the full downside was not yet priced.

Sparta flagged the risk on 4 February.

Eight days later, NWE jet spreads had fallen sharply, cracks were lower, and differentials were rolling over.

This is what we saw, when we saw it, and how desks using Sparta were positioned before the drop.

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Setting the stage: NWE jet under pressure (4 Feb)

NWE Jet CIF differential: $61.50/mt
NWE Jet CIF spread: $16.05/mt
NWE Jet CIF crack: $27.25/bbl

Seasonal demand was still soft.

Under the surface, supply was opening up.

What Sparta saw

1. All Asian jet arbitrages into Europe were open

Sparta’s Pricing Centre (Jet) showed:

Singapore and North Asian LR2s fully workable
Cargoes pricing into Rotterdam, Le Havre, and Barcelona

Incremental Asian supply was economically viable West.

2. Premia were softening into incoming barrels

European jet premia were easing ahead of the seasonal buying wave.

More supply.
Soft demand.

A vulnerable structure.

3. Commentary called the extension lower

On 4 February, Sparta wrote:

“The decline has been sufficient to reopen all Asian-origin jet arbitrages into Europe… The weakness is already evident in northwest Europe… That downturn looks set to extend, and the Jet CIF differential should follow.”

The direction was clear.

Signal. Not hindsight.

What happened next

By 12 February:

Spread: $16.05 → $10.50/mt
Crack: $27.25 → $24.90/bbl
Differential: $61.50 → $57.00/mt

In eight days:

Spread down $5.55/mt
Crack down nearly $2.40/bbl
Differentials softer

The weakness extended exactly as flagged.

The result: Call made: 4 Feb at $16.05/mt spread

By 12 Feb, NWE jet had repriced sharply lower.

Traders with the signal got ahead.
The rest followed the screen.

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