Turnaround Tuesday: BOGO Breaks +$200 as Diesel Takes Control
August ICE gasoil approaches Wednesday’s expiry near $1,335/mt, yet the rest of the distillate complex is refusing to normalize. Aug/Sep remains roughly +$88 to +$92/mt and Aug/Dec around +$263 to +$266/mt. September heating oil near $4.252/gal against WTI around $83/bbl leaves the heat crack close to $96/bbl, with Sep/Oct heating oil still backwardated by 13.3 cents/gal. The options market strengthens the signal. September gasoil trades around $1,244/mt, with call open interest near 1,896 contracts at $1,350, 1,200 at $1,400 and 875 at $1,500. Implied volatility rises from roughly 62% around $1,250 to 73% at $1,500. A move to $1,500 requires another 20.6%, so the options book does not forecast $1,500, but it shows traders paying heavily for upside tail risk with only 24 days to expiration. Tomorrow’s ICE gasoil expiry therefore gives us a useful test. If September gasoil remains above $1,200/mt and the heat crack stays above $90/bbl after August disappears, the distillate squeeze has moved beyond an expiry story.
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