Heat Crack Strength Holds Gasoil Market Firm as Logistics Fray in Brazil and Europe

The European gasoil market continues to exhibit a strong backwardation structure, with the August/December spread holding at +$50/mt. This is underpinned by an exceptionally firm heat crack margin, which sits at $33.50/barrel, a clear sign of robust spot distillate demand. These dynamics are keeping biodiesel physical barge markets well supported in the Amsterdam-Rotterdam-Antwerp (ARAG) region. FAME 0 barges traded at a solid +611 over ICE gasoil, while RME fetched a $30/mt premium to FAME. However, gross margins are diverging sharply: RME margins remain healthy at $139/mt, but FAME gross margins have collapsed to under $10/mt, reinforcing market preferences for premium grades.