Don't usually like to follow monthly charts but I believe it is timely to look at ICE gasoil monthly chart that seem to indicate we are sitting on cusp of 630 support. Energy market today seem to face realization today that China, Southeast Asia, and Europe demand maybe much weaker than data has shown. The data from China is definititely trending that way. Screen heat cracks are still above $20/brl encouraging more diesel production so something has to give soon. Was looking at Sep 12 2021 data for Biodiesel in Northwest Europe when ICE gasoil was $602/mt with BOGO at $630, we were displaying Biodiesel RME premium at +1142 when RME/F0 was +145. Today in Northwest Europe, Gasoil is at $636.50/mt and we are displaying RME premium over ICE gasoil at +533/mt while RME/F0 is +$15.20. Although the RSO situation is much better this year than 2021 see below graph, we clearly have depressed premiums. Also note that BOGO is currently trading at +$269/mt or $374/mt less than in 2021. So if you adjusted for BOGO value, Biodiesel premiums in Northwest Europe are curerntly now nearly $250/mt less than in 2021 under the same mandate. We clearly have a demand issue and unless that changes rapidly with some urgent economic intervention, we will see much lower levels in Q4 for ICE Gasoil which is never good for the Biodiesel sector.
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