SUMMARY
Jet and Gasoil Singapore FOB cargoes extended their multi-month rally into August, Jet averaging $148.37/bbl (+6.8% MoM, +75.7% YoY) and Gasoil $156.46/bbl (+9.9% MoM, +80.9% YoY), with both grades jumping over $10/bbl in a single session on 11-Aug. The Regrade (Jet minus Gasoil) widened from -$3.80/bbl in July to -$8.01/bbl in August, confirming the move was Gasoil-led: Middle East export disruption and the Russian diesel export ban kept diesel/gasoil structurally tight, while European jet balances loosened as replacement supply improved and peak summer travel demand faded. Both forward curves stayed backwardated but flattened, with the back-end repricing independently of, and by a larger margin than, the prompt on both grades. Singapore traded at a persistent discount to NWE and USWC all month, and the Jet Trans-Pacific arb widened from -$55.80/MT to -$129.91/MT as a wide Brent-Dubai EFS kept pulling Asian barrels west. Volatility collapsed to six-month lows on both grades (Jet CV 4.43%, Gasoil CV 4.57%) even as flat prices kept climbing, pointing to an orderly, well-flagged rally rather than a fresh shock.
MARKET ACTIVITY
Dare Global was the largest net seller in Gasoil, Vitol in Jet
- Jet: 142 executed trades across 71 buyer-seller pairs; named counterparties are overwhelmingly independent trading houses (intermediary), consistent with positioning rather than directional producer or consumer flow
- Vitol Asia was net seller (24 buys vs 42 sells); Dare Global Limited was near-balanced (41 buys vs 45 sells); Gunvor Singapore was the largest net buyer (8 buys vs 2 sells)
- Gasoil: 372 executed trades across 167 buyer-seller pairs, more than double Jet's activity; Dare Global/DARE was the dominant net seller (140 sells vs 73 buys), consistent with intermediary length distribution into the rally
- Gunvor Singapore and Vitol Asia were the largest net buyers (buy/sell ratios of 2.46 and 1.52); Trafigura was also a net buyer (ratio 1.55)
PRICE ACTION
Jet Fuel Singapore FOB Cargoes
Gasoil 10ppm Singapore FOB Cargoes
CROSS-MARKET DYNAMICS
- Regrade (Jet minus Gasoil) averaged -$8.01/bbl in August vs July's -$3.80/bbl, opening at -$8.78/bbl (3-Aug) and closing at -$7.73/bbl (31-Aug); the month's tightest reading was -$9.92/bbl (21-Aug), the widest -$4.98/bbl (7-Aug)
- Rising European jet inventories, steady Dangote refinery flows through June-July, and fading summer travel demand loosened the global jet balance, pushing the Regrade to its August low on 21-Aug
- Diesel/gasoil stayed structurally tight over the same period on Middle East supply shortages and the Russian export ban, even as ARA inventories showed early signs of recovery
- Jet crack vs Dubai M1 swap compressed $8.66/bbl ($68.23/bbl to $59.57/bbl) as Dubai M1 rallied to $90.73/bbl faster than Jet; Gasoil crack compressed only $2.47/bbl ($67.44/bbl to $64.97/bbl), confirming Gasoil kept pace with crude while Jet lagged
CROSS-REGIONAL DYNAMICS
- Singapore held a widening discount to USWC Jet all month
- Jet Trans-Pacific arb (Singapore vs USWC, M1) widened from -$55.80/MT (3-Aug) to -$129.91/MT (31-Aug), a $74.11/MT move, as Singapore Jet grew steadily cheaper than USWC through the month
- Jet East-West arb (Singapore vs NWE, M1) narrowed slightly from -$211.82/MT to -$181.63/MT but stayed deeply negative; Gasoil East-West arb narrowed from -$171.89/MT to -$139.54/MT, also staying negative
CURVE STRUCTURE
- Back repricing on both grades; M12 outgained M1 by more than 3x on Jet and nearly 2x on Gasoil, with backwardation intact
- Jet M1 gained $6.71/bbl (+4.7%) over the month while M12 gained $17.27/bbl (+16.7%); Gasoil M1 gained $12.90/bbl (+9.0%) while M12 gained $17.08/bbl (+16.7%)
- Back repricing: deferred months moved independently of, and by a larger magnitude than, the prompt on both grades; the curve stayed backwardated throughout rather than flipping to contango
- Gasoil's backwardation proved more resilient than Jet's: Gasoil M1-M12 narrowed only $4.18/bbl over the month vs Jet's $10.56/bbl narrowing, consistent with Gasoil's firmer crack and negative Regrade trend
PRICE VOLATILITY
Jet Fuel Singapore FOB Cargoes
Gasoil 10ppm Singapore FOB Cargoes
- August CV of 4.43% (Jet) and 4.57% (Gasoil) were the lowest readings of the trailing six months for both grades, well below the March peaks of 17.81% and 19.98%
- The compression coincides with a 6.8% (Jet) and 9.9% (Gasoil) flat-price rally in the same month; low realized volatility alongside a sustained rally points to an orderly, well-flagged move (Middle East outage extensions, Russian export ban) rather than a single new shock
- Hedging and risk models calibrated to the March-July range (roughly 8% to 20% CV) are overestimating near-term risk if August's compressed regime persists into September
SOMETHING TO WATCH
- China's September export allowance:
- Observation: Chinese refiners are guided to export approximately 4 mn MT combined of gasoline, diesel and jet fuel in September, versus roughly 3 mn MT per month in 2025
- Why it matters: rising Chinese jet and diesel exports would add regional supply and could cap further Regrade widening or crack expansion in Singapore if guided volumes materialize
- What to monitor: actual September export volumes against the 4 mn MT guidance; a shortfall against guidance would remove the cap on Regrade widening and crack expansion
- Middle East and Russian supply disruptions:
- Observation: Middle East export constraints and the Russian diesel export ban remain unresolved bullish risks for global diesel
- Why it matters: persistence of either constraint keeps global diesel/gasoil tight and would continue to support Singapore's Gasoil crack and the negative Regrade even as Chinese and Indian replacement barrels grow
- What to monitor: Jazan refinery restart confirmation; Strait of Hormuz shipping conditions; Russian refinery outage and export-ban status
Note: All figures, prices and market activity referenced in this report are based on the period covered by this monthly update.
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