Fri 19Oct2018: Gasoil trends down to $712 with backwardation widening quite a bit for spot to almost $5/MT while x/j spread has widened $4/mt to $12.25/mt at the same time as Heating oil crack has exploded today to almost $28/Brl. Refiners are cracking for diesel as gasoline crack barely hovers $10/brl. No sign of increasing maintenance in US either meaning that margin are simply too attractive despite fact that both WTI and Brent crude have turned into a nearby spot contango and almost flat through April. In US Biodiesel, margins have disappeared as BOHO has narrowed close to 10 cents per gallon while D4 RINs remains at a paltry 32.5 cpg which is artificially depressed because of E15 and continued Trump administration assaults on RFS. In EU, as expected with strengthening BOGO, we are seeing premiums on FAME come back to +190 on the Spot and +165 for Q4. RME remains difficult to find at less than +235 premium Vs FAME for Q4. POGO has strengthened following moves by Indonesia to increase biodiesel blend but with continued weakness in Bean oil, difficult to see the light quite yet as only 47% of US Soy crop harvested. Yuan made a record low at 6.9411 and probably next stop is back to 7 while in India the rupee recovered to 73.33 late on Friday – the world now marches towards full Iran sanctions in 2 weeks.

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