Diesel Roars, RINs Rebound, EPA Still Silent
The strongest signal on the screen today is diesel, not crude. September ICE gasoil surged to $1,275.50/mt while January closed near $1,075.75, putting Sep/Jan backwardation back at $199.75/mt. January gasoil now trades almost 16% below September. September heating oil is around $4.35/gal, up more than 7 cents, while WTI sits near $83/bbl and Brent remains below $90. The US heating-oil crack is back close to $100/bbl. This move is occurring despite a stronger dollar and a hawkish Jackson Hole message. Crude is pricing improving availability. Refined products are still pricing scarcity. My view remains unchanged, the distillate problem is not finished and a move toward $1,550/mt ICE gasoil remains in play if prompt supply fails to improve through September.
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