The Curve Blinks, Freight Does Not
Markets were calmer and generally firmer Tuesday, but the important move was inside the distillate curve. September ICE gasoil finished around $1,298/mt while January reached roughly $1,089, leaving Sep/Jan backwardation near +$209/mt. This is a meaningful retreat from recent levels above +$240, but it does not signal an end to physical tightness. Deferred gasoil rose faster than the front rather than prompt gasoil breaking lower. The heating-oil crude crack gives a stronger signal, reaching roughly $102/bbl with WTI still around $85. Physical indications show Rotterdam FOB EN590 around $1,333/mt, Rotterdam CIF around $1,343 and Mediterranean CIF close to $1,399, versus roughly $1,190 in Singapore and $1,143 in the Arab Gulf. Europe is still paying a substantial premium to secure diesel. The curve has relaxed, but the replacement barrel has not become cheap.
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