Middle East tension pushes Asian gasoil EFS to 42-week low, opens arbitrage window

S&P Global Platts | Sep 17, 2019 at 4:30 AM
  • The front-month October gasoil Exchange of Futures for Swaps widened to its lowest level this year, opening the arbitrage window for Asian suppliers to divert surplus distillate cargoes to Europe, to plug a potential supply shortage amid geopolitical tensions in the Middle East.
  • The EFS — the spread between front-month 10 ppm gasoil Singapore swaps and the corresponding ICE low sulfur gasoil futures — measures the relative strength between the Asian and European gasoil markets.
  • CIF NWE cargoes of ULSD were assessed at a three-month high of $642.75/mt Monday, $61.25/mt higher day on day at a $5.75/mt premium over front-month ICE LSGO futures, up from a $4.25/mt premium Friday.