Extreme volatility in the oil markets remains the main theme of the bean oil/gasoil spread. The front month gasoil contract shed $25/t on Tuesday to drive front month BOGO spreads back up around $20/t as the market’s focus shifted away from strong US economic growth data to the likelihood of a large build in US crude stocks when the DOE reports its data this afternoon, coupled with renewed concerns over China’s robustness.
Tuesday’s API data pointed to a 7.6mn bl build in US crude stocks, outstripping expectations for a DOE build of 4.44mn bl. API data also outlined ongoing US crude oil imports as September refinery utilisation rates start to drop, piling more distillates onto US stockpiles.
Palm oil spreads to EU rapeseed oil are back above the $300/t threshold this morning for the first time in four days, with bean oil dropping to a $163/t discount to rapeseed oil. The rapeseed futures curve remains essentially flat through to May next year however relative to the carry structures built into palm and bean oil futures markets.
MS – 02/09/2015