Principal Asset Management flags record diesel crack spreads as refined products supply tightens
USO•Principal Asset Management said distillate crack spreads rose more than 260% in Europe and the U.S. over 12 months, while crude rose about 55%. European diesel inventories fell about 23% over the same period.
1. Diesel spreads surge
Principal Asset Management flagged record distillate crack spreads, citing tight refined-product supply as well as Strait of Hormuz risks. Over 12 months, the WTI 3-2-1 crack spread climbed about 183%; the NYMEX ULSD crack spread stood 4.5 standard deviations above its 10-year mean, and ICE Gasoil was 5.1 deviations above. European diesel inventories fell about 23%, raising vulnerability to further supply shocks across refined products.
