Diesel Breaks the Glass Ceiling as SAF Meets the Cost Test
Thursday delivered another violent repricing of prompt energy. August Brent rose 6.3% to $100.03/bbl, WTI gained 5.3% to $91.47/bbl and August ICE gasoil jumped $103.75/mt to $1,282/mt. The diesel heat crack reached $90.78/bbl, while August/December gasoil backwardation widened to about $250/mt and August/March moved above $340/mt. These spreads point to immediate distillate scarcity rather than a uniform rally across the curve. Gold moved in the opposite direction, pushing the gold-to-Brent ratio down to 40.42 after testing support. As long as the heat crack holds near $90/bbl and prompt backwardation stays above $200/mt, shorting gasoil because the outright price looks high carries exceptional risk. Further disruption around Iran, the Strait of Hormuz or the Red Sea would put the March gasoil high near $1,554/mt back into view.
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