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Gasoil rally weakens BOGO further down -37% in last 3 months

Gasoil has rallied flat price nearly $85/mt since Jun6 with backwardation of Jul/dec rallying to +$19 (remind you we were at -$4 on Jun3). Consequently BOGO has now weakened to +$181. All the action is coming from an issue on Gasoil renewed tighteness and not Bean oil which has essentially been weak. FAME premium in ARAG have finally come down a bit to +475 and so has UCOME at +567. Flat price backwardation in FAME from q3/q4 is +107 while it is +49 for UCOME. There is no supply issue in biodiesel and there should not be in Gasoil as heat crack is healthy at $25/brl. Therefore we can only attribute the move in gasoil to a geopolitical risk premium.

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