Thu 10Jan2019: ICE gasoil bounces back to $565 as crude up almost 20% in the last 10 trading sessions and weekly has barely reached over its 100 day SMA and RSI is just above 42 – with strong mid distillate basis in Asia, I don’t see why we cannot reach back over $600 before end of month and perhaps reach over 50daySMA. In US 3:2:1 weekly cracks still strong only because of distillate at $26.77/Brl. WTI still showing $8.5 discount to Brent despite strong US exports, again a reflection of strong demand and not only US. On the US Biodiesel front margins have bounced back but still production margins quite a bit negative as RINs not doing the work while BOHO got 13centspergallon weaker because of HO move – I think we will see BO move higher imminently. Only thing working in US is California LCFS credit that remain strong with $191/mt trading yesterday. Meanwhile in Europe RME values still in backwardation with spot showing +485 while Feb is discounted $100. RED FAME values now showing +280 for Q2 while Q3 at +285 still leaving PME arb open to EU. On the currency front CNH at 6.85 while INR is at 70.38 – not much changed despite weaker USD mostly against Yen.


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