How backwardation has changed the landscape of storage based markets taking floating storage to zero. Are we about to see a major change in markets in Q4?
Most of the floating storage has now disappeared through market forces and higher freight rates (+a larger dark fleet). Sea freight already turned south in Jun. Are we about to see a major change in structure? Screen heat crack is still $21/barrel encouraging distillate production everywhere. Q4 will be a decisive moment for the market. Market is awaiting China Sep export quota announcements and Russia fuel oil exports increased in Aug after maintenance completion and no reason to think that Sep will be strong.. Technically nothing has changed with the gasoil chart and it is still looking very bearish yet we are still closing firmly above $700 @725/mt on friday while enjoying a bank holiday this monday.
Comments