A very mixed picture on Gasoil/Diesel globally with a 16% drop in exports of petroleum products from China in September as the country's refinery output is down 5% due to maintenance. There is a significant loss in diesel margin in the Asia region, barely reaching $12.7 per barrel while screen heat crack is in the $21/brl.. Perhaps the fact that October is a short month in Asia because of the early Golden Week, while in Europe, the end of October is All Saints' holidays, might reflect a general lack of demand overall this month. With respect to Biodiesel, we are now trading the window towards delivery in the latter part of November post US elections. The two biggest news in Biodiesel/RD are 1/ Indonesia failing its case with the European Court of Justice against Countervailing duties (This will probably push Indonesia to move to 40% bio blends in January) and 2/ the US Supreme Court will now hear the Small Refinery Exemptions dispute (this means no one will come buying RINs to cover liabilities anytime soon). The US Soybean harvest is the fastest in 10 years, with 81% completed, while Brazil's planting has not even reached 20% as farmers wait for more rains. The Gasoil chart hasn't changed much since it broke down on April 24. Expect slow and very cautious markets through US elections.
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