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Gasoil backwardation returns but for how long?

Jun/Dec was at -7.75/mt contango on May 3 and we are now back to +7. Quite a move ahead of memorial day. On the biodiesel market in Northwest Europe we see that backwardation in premium was slammed down to +42 with FAME 0 now trading below +200 along along the curve. BOGO on the other hand still showing +381 which is the widest spread we have seen this beginning of the year yet BOGO is down 37% in the last 3 months. Soybean oil remains under pressure even today having dropped 22% in last 3 months. FOB premiums in South America are not moving much still widely offered at -750 for july with bids not better than -870. With the large bounce in heat crack margins to $27/brl, it is difficult to see how anyone could have any supply issues with gasoil. Heard today that US refiners surprised to find themselves competing with Russian gasoil barrels in South America.

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