Distillate Markets Liquidate On “Peace Headlines” While Biodiesel Fundamentals Continue To Tighten
ICE gasoil and global distillate markets suffered another round of heavy liquidation today as trading systems continued reacting to headlines suggesting a possible temporary framework agreement with Iran. Yet the underlying physical structure of the middle distillate market remains historically tight. ICE gasoil May settled near $1,171/mt, still up 74.6% over 3 months, while May/Dec backwardation remains near +$283.75/mt and Jul/Dec still trades at an extraordinary +$191.75/mt. Singapore 10ppm diesel closed near $149/bbl while Singapore jet fuel also remains near $149/bbl despite both markets correcting more than 5% on the session. US heating oil continues to signal structural scarcity as Jul/Dec backwardation still holds near +47 c/gal while Jun/Sep remains near +38 c/gal. These numbers do not describe a well supplied market.
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