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Diesel rally +$80/mt this month to nearly $800/mt

Backwardation of ICE gasoil Jul/Sep is now attempting to break +$5/mt while Sep/Dec has also rallied to +12.50/mt. Screen diesel (HO) is still $26/brl in US while diesel cargoes moving to Europe and further strengthening US refiners margins. All boats are being buoyed higher including Biodiesel with UCOME reaching $1389/mt FOB ARAG equating to gross margin of $339/mt on the spot market. We have not see such UCOME prices since April & Feb - seems we make such high every 2 months. Freight rates from Asia are also moving higher on account of red sea issues finally bring UCO and POME prices in Europe higher. HVO (RD) class 2 (made from UCO) now only $100 premium to UCOME while HVO class 4 (POME) is slightly cheaper. Gasoil chart still does not look good but still better than the Soybean oil as BOGO now trading firmly at +170 which is $282/mt discount to current spot premium being paid for FAME0 in ARAG.

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