Europe Politicizes Biofuels, U.S. Suffocates Under Logistics
Strange tape today as Europe once again traded against fundamentals. ICE gasoil slid to around $709/mt in a nearly one standard deviation move lower despite escalating sanctions rhetoric and tightening language from Brussels. The forward curve remains backwardated but visibly softer, with Nov/Dec narrowing 15% to +$16.75 and Nov/Apr at +$60.25. Cracks should be stronger at this stage of Q4 if supply risk were real, but screens continue to price pessimism rather than shortage. Diesel weakness mechanically inflated BOGO to +412 (+2.21%), a spread move driven by soft gasoil rather than feedstock demand. ARAG reflected that stress as FAME 0 weakened to $1,360/mt (-$40.75), RME printed fp $1,436/mt and UCOME traded fp $1,523/mt, keeping UCOME/F0 at +163. BOPO cracked lower to +48 (-20%), opening the door to a repeat of last year’s slide into negative territory even if palm keeps leaning lower.
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