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ULSD Market Update – September & October 2025
The ULSD market is entering a period of mixed signals.
Key drivers:
Crude Oil: Brent easing from about USD 68 to USD 59/barrel by Q4, lowering input costs.
Inventories: Distillate stocks remain below long-term averages, supported by strong exports and refinery downtime.
Seasonal Demand: Heating oil consumption rises as cooler weather sets in.
Refining Margins: Distillates remain profitable, keeping supply balanced but firm.
Risks: Weather events, logistics constraints, and geopolitics may create volatility.
Outlook (Sep–Oct 2025):
Spot ULSD prices: Stable to slightly lower in most regions.
Retail pump prices: Small declines, slower to adjust than crude.
Inventories: Likely to remain tight with seasonal draws.
Refiners: Margins expected to stay strong on exports and constrained supply.
Takeaway:
Fuel-dependent businesses should review hedging positions, manage inventories carefully, and prepare for potential volatility into Q4.
#EnergyMarkets #ULSD #DistillateFuel #FuelOutlook #OilAndGas #EnergyRisk #SupplyChain #drakensbergenergy
ULSD Market Snapshot – 2 September 2025
Northwest Europe (CIF ARA): ULSD 10ppm was assessed at $714.50/mt, up $18.75/mt day-on-day. FOB NWE cargoes closed at $705.75/mt, reflecting sustained strength in European middle distillates.
Mediterranean (CIF Genoa/Lavera): ULSD 10ppm stood at $721.00/mt, up $18.25/mt, while FOB Med cargoes traded at $710.00/mt, also up $18.50/mt. The Med remains at a slight premium to NWE, underpinned by firm regional demand and constrained clean tanker availability.
Global Context: The rally in ULSD follows refinery disruptions across Europe and West Africa. Platts reported unexpected outages at Dangote’s FCC unit in Nigeria and extended maintenance at Shell Pernis (Rotterdam), both of which reduced prompt availability of middle distillates. Traders noted that despite Dangote’s outage, product remains in tanks, limiting near-term shortages.
Spreads & Differentials: The gasoil 0.1% market tracked higher alongside ULSD, with Med cargoes assessed at $710.25/mt. The ULSD MOPL differential also firmed, reflecting bullish paper market sentiment.
Futures: ICE Gasoil September contracts settled at $703.50/mt, with forward months easing slightly (October $698.75/mt, November $686.00/mt), indicating backwardation in the curve.
Macro Drivers: Brent futures traded around $68.81/bbl (Nov), offering stable feedstock costs. The European diesel complex continues to price in strong road transport demand post-summer and ongoing tightness in the gasoil balance.
Summary:
ULSD prices across Europe surged by nearly $19/mt on 2 September, marking one of the strongest daily gains in recent weeks. Mediterranean values remain firm at a premium to NWE, supported by robust demand and refinery outages limiting supply. Backwardated futures suggest near-term tightness but potential easing into Q4 as refinery runs normalize.
#drakensbergenergy #ULSDMarketSnapshot #Diesel #EnergyTrading #Platts #refinedproducts
President Trump has convened a packed diplomatic meeting at the White House hosting Ukrainian President Zelensky alongside European leaders to push for peace in Ukraine. The talks focused on security guarantees without NATO membership and possible direct talks between Zelensky and Putin, potentially hosted by the US amid cautious optimism from both Kiev and Washington.
Markets showed mixed reactions. Brent Crude climbed over 1 percent, hitting 66.60 dollars a barrel as traders contemplated potential easing of war driven supply uncertainty. Meanwhile, ULSD futures continued to slide, reaching a seven week trough at about 2.24 dollars per gallon, shedding about 5 cents per gallon and down over 2 percent this week a bearish signal despite peace hopes.
This unfolding diplomatic play Trump shepherding a possible Putin Zelensky summit with European support could mark a turning point or just the calm before the next storm.
#UkrainePeace #TrumpZelensky #putinsummit #OilMarkets #BrentCrude #ULSD #EnergyTrends #Geopolitics #drakensbergenergy
Trump-Putin Standoff Sparks Oil Market Jitters (Week of 29 July – 3 August 2025)
Oil markets are on edge as President Donald Trump’s threats to sanction Russia unless it agrees to a ceasefire with Ukraine have shifted trader sentiment sharply. Despite weak global demand forecasts and increased production from OPEC+, the market turned bullish, with Brent and WTI prices climbing on the back of rising geopolitical risk.
Brent crude opened the week above $69 per barrel, after Trump not only warned Russia of sanctions but also imposed a 25% tariff—and an additional levy—on Indian crude imports from Russia. India pushed back, saying it has no intention of halting long-term contracts, while China reiterated its right to secure energy supplies based on national interest.
The market’s reaction was swift. Institutional traders increased their bullish positions on Brent and WTI by nearly 40,000 contracts in the last week of July—the largest increase since tensions escalated between Israel and Iran earlier this year. The concern is clear: if Trump enforces secondary sanctions on buyers of Russian crude, it could disrupt up to 7 million barrels per day in global supply, pushing prices sharply higher.
At the same time, U.S. relations with India have soured, with trade tensions rising and strategic deals at risk. Trump has also threatened China with 100% tariffs, a move that could unravel recent trade progress and drive U.S. fuel prices up at home.
#OilMarkets #TrumpPutin #RussiaSanctions #EnergyPolitics #BrentCrude #WTI #IndiaOil #ChinaOil #GlobalOil #Geopolitics #CrudeOil #OilPriceVolatility #DrakensbergEnergy
ULSD Market Snapshot: 28 July – 3 August 2025
Northwest Europe (CIF ARA):
Prices trended slightly lower, closing the week around $762/MT, down from the previous week’s $770/MT. The dip was driven by sluggish inland demand and ample product availability across the ARA hub. Margins for refiners came under modest pressure, though crack spreads remained positive.
Mediterranean (FOB Med):
ULSD FOB Mediterranean ended the week at $748/MT, with a marginal week-on-week decline. Strong Russian inflows via Turkish blending hubs continued to weigh on regional differentials, while North African buying remained limited. Traders reported more offers than bids in the East Med.
Middle East (FOB UAE):
The UAE market was stable at $726/MT, with limited spot activity out of Fujairah. East African demand remained firm, but sellers were hesitant to commit volume without firm letters of credit. Arbitrage to East Africa was slightly less attractive due to high freight rates and port congestion in Mombasa and Dar es Salaam.
Asia (FOB Singapore):
FOB Singapore ULSD held around $735/MT, underpinned by steady regional demand, particularly from Indonesia and the Philippines. Chinese exports were subdued, offering some price support. Traders noted that upcoming refinery maintenance across Northeast Asia may tighten the regional balance into August.
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ULSD Market - Post‑OPEC+ | 7–11 July 2025
What was evident this past week is when OPEC+ speaks, diesel markets listen. After the July 5 OPEC+ meeting, which confirmed a hefty 548,000 bpd production increase for August—the largest monthly rise yet—the diesel markets paused to absorb the implications. While the decision signals an aggressive strategy to reclaim market share, it’s the backdrop against which global demand, refining activity, and geopolitical uncertainties that are now playing out.
On July 5, eight key OPEC+ members, including Saudi Arabia and Russia, convened and agreed to implement the largest monthly supply boost since the policy shift in April. The official statement reaffirmed a gradual unwind of the 2.2 million bpd cuts; August’s increase alone covers roughly 80% of that total (Reuters).
Spot ULSD showed mild resilience—rising, but far from spiking. July futures stayed elevated.
Thanks to seasonal demand and downstream refinery operations, refiners still enjoy strong margins—even as diesel inventories tighten
Middle East shipping tensions and Red Sea risks are still simmering—keeping risk premia in play .
NB: Abundant crude ≠ loose diesel market — unless refining output outpaces demand. The real test comes with actual barrels hitting markets in August.
Northern Hemisphere summer travel may absorb much of this extra supply, at least short-term so we are not out of the woods as yet.
What next:
August 3: Next OPEC+ meeting to decide September quotas—likely another 550 kbd increase (Reuters).
Mid‑July: EIA inventory update—crucial for gauging whether diesel physical tightness persists.
#ULSD #OPECPlus #DieselMarkets #EnergyTrading #RefiningMargins #drakensbergenergy #FuelStrategy #MacroEnergy
ULSD Market Insight | July 1–4, 2025
Diesel steadies while oil markets eye OPEC+ and macro headwinds
As the second half of 2025 kicks off, the ultra-low sulphur diesel (ULSD) market finds itself in a cautious holding pattern.
OPEC+ meets on July 6. There’s growing consensus that production will rise again—potentially another 400,000+ barrels/day in August. Markets have priced some of this in, but there’s still risk
if member compliance falters or global demand shows softness.
U.S. inventory levels are once again in focus. The American Petroleum Institute hinted at a surprise crude build last week. That’s not typical for summer—and it may weigh on refined product sentiment if confirmed by the EIA this week.
A softer dollar would normally support oil demand—but confidence remains fragile.
In short, July started with more questions than answers. The diesel market is calm on the surface, but undercurrents—from OPEC policy to U.S. jobs data—are making refiners, traders, and importers
rethink their positions for Q3.
#DieselMarkets
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#FuelTrading
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