Latest News from the Tallarium team

Bullish price action in July across the barrel with flat price and product cracks marching upwards

Stanislav avatar
Shared by Stanislav • July 30, 2023

We wrote last month about the disconnect between crude flat price and the stellar performance in clean product cracks. This month crude responded to the strength and the ongoing chatter of accelerated Chinese crude stockpiling, with Brent rallying $10/bbl up to $84/bbl.

While crude rallied, gasoline and diesel markets soared higher to make new year to date highs. Gasoline remains the best performing part of the barrel, with the August Ebob Crack jumping by $10/bbl to trade above $30/bbl.

Distillate spreads and cracks have also spiked, led by Eastern strength. All in all this is keeping margins at very attractive levels for refiners as we enter the heart of 3Q.

Macro bears will continue to beat the drum, but product strength and the recent IMF global growth forecast upgrade to 3.0% from 2.8% should make them think twice in terms of the balance of year expectations for global oil demand. Perhaps further oil flat price appreciation is required to put the brakes on demand.

Light Ends

Gasoline markets remain very very strong. Aug/Sep EBOB is trading +45/mt and Aug/Sep 92R spreads are over $3/bbl backward. The strength is relentless. Naphtha remains dislocated and weak but July saw cracks begin to rebound from the year-to-date lows and there seems to be some support in timespreads at around -$2/mt in the front months.

August EBOB Crack


Keen observers of the price action in distillate differentials through month of June will have seen the signs of strength that have since translated into soaring timespreads and cracks across the price centres.

The resurgence in distillate values seems to have been Eastern led, with August East/West ticking up from -$16/mt to -$10/mt this month before the ICE GO screen took off to make ARA the strongest price centre.

As has been the theme for a long time, global distillate stocks are running at record lows so it is inevitable that the biggest import hub, North-West Europe, will have to intermittently jump in value to attract re-supply.

Distillate remains a very difficult market to short, particularly with hurricane season around the corner and Europe looking to build some stocks before a winter without Russsian barrels.

Aug/Sep Sing GO

August GO East/West

Fuel Oil

Not wanting to be left out, fuel cracks also performed in July with 3.5% FO Crack rallying $3/bbl up to -$6/bbl over the last couple of weeks.

March intraday pricing and liquidity levels for Light Ends and Distillates

Stanislav avatar
Shared by Stanislav • March 28, 2023
  • Crude faced a torrent of macro selling this month as the market de-risked in light of the fallout from SVB and the banking crisis.
  • Amidst this almost $10/bbl correction, clean products held up with significant rallies in cracks and spreads, suggesting product fundamentals remain tight and demand may in fact be improving in the lower flat price environment.
  • Gasoline has taken over the mantle from Naphtha and is now the star performer with Rbob, Ebob and 92R cracks all very well bid, as shown by Tallarium data showing offers thinning out through the 2nd half of the month.

Please note intraday Bid/Offer data uses box plots indicating:

  • The upper quartile and lower quartile price range
  • The maximum, minimum and median Bid or Offer

  • European distillate differentials and Gasoil spreads are running out of steam once more having rallied significantly since the carnage in February. With the recent collapse still very fresh in the memory of traders, holders of length will be wary of weathering another bout of weakness.
  • The April Gasoil crack remains range-bound but trending lower now. As Gasoline and Naphtha start to carry the margin, Gasoil may increasingly take a back seat.
  • The OTC markets gave an early signal for this latest Distillate corrections as the 10ppm CIF Med diffs came off sharply mid-month potentially on the back of cargo hedging. Gasoil can remain under pressure if the Med continues to trade in single figures.
  • There was a significant amount of Jet buying over the last week when Brent approached $70/bbl, which is suggestive of airline hedging coming back into the market after a long period of demise for Jet diffs.
  • Tallarium quote data shows that there were 4x as many bids as offers on the 21st of March for April Jet. This preceded a sharp rally in Jet diffs, however the market has eased at the time of writing.