Happy Thanksgiving! Just like a well-stuffed turkey roast, the market has gobbled up refinery margins, with the M1 margin dropping from nearly $16/bbl on 18 Nov to $11.50/bbl on 27 Nov, bringing it back within the 5-year range. Gasoil has been the main carving knife here, with the front crack sliding from above $39/bbl on 19 November to below $27/bbl, further pressured by a 1.2mb build in US distillate inventories last week. Gasoline also posted a w/w increase overall, but a draw in US PADD 1 stocks helped support RBOB prices, effectively putting a floor under the broader gasoline complex. In the broader futures space, Brent remains subdued below the 10-day moving average, caught in a “will they-won’t they” stance between Ukraine and Russia ahead of a US delegation’s visit to Moscow to discuss a ceasefire deal next week. The Kremlin says Russia is ready for “serious” peace talks, though it has framed the US ceasefire proposal more as a basis for a future deal than something to sign today. In other news for crude, China’s independent refiners have received their first batch of crude import quotas for 2026. These are higher y/y, hinting at continued buy-side appetite from China. Still, as we move into the new month, liquidity is likely to thin, even as potential catalysts in the form of a ceasefire agreement and the 10 Dec FOMC meeting loom on the horizon.
In crude, the Dated Brent physical differential has seen support w/w amid bids in WTI Midland and Forties. In CFDs, we saw outright buying in prompt Dec rolls. US players bought the 5-9 Jan vs Cal Jan, which has supported the implied physical differential in January over back-end Dec. Prompt DFL contracts have risen due to a stronger physical differential. However, we have begun to see selling in the Dec/Jan’26 Dated Brent. Brent/Dubai has traded sideways w/w. We saw some deferred Brent/Dubai selling from banks in Q2-26-Q4’26, reflecting margin hedging.
HSFO has weakened, especially in Singapore. We saw an axed seller in Jan’26 380 E/W combined with cross-arb selling in Mar/Jan and Apr/Jan 380/barges. The Dec’25 Visco was volatile on 26 Nov due to rumours of a refinery buying due to a Middle Eastern tender. VLSFO has also been weak, with the Sing 0.5% crack under pressure due to MOC selling and a trade house stopping out of Sing spreads. European MOC has also seen good selling this week, but the 0.5% E/W weakened on Sing VLSFO weakness.
In distillates, ICE gasoil reversed its strength this week, with the Jan’26 futures crack trading down to $25/bbl as developments were made to the Russia-Ukraine peace deal. Easing physical tightness in the European market also pressured ICE gasoil prices this week. In contrast, Singapore gasoil was better supported with good buying seen in the front E/W boxes and Q2/Q3’26 E/W box, the latter of which traded up to -$0.32/bbl this week. NWE jet and regrade traded relatively rangebound, though hedge funds were selling in Dec/Jan’26 kerosene and Dec/Jan’26 regrade. Deferred HOGOs softened this week on the back of weaker ICE gasoil.
Gasoline has been strong this week, with the largest moves occurring on 27 Nov, as RBBR and EBOB cracks rallied and European barges performed unusually well for the season. While 92 spreads were well bid earlier, they turned more offered on 27 Nov as EBOB began to lead the strength, softening the E/W and arb despite RBBR being up about 50c/bbl on the week. Q2’26 arbs have moved from flat to mid-1c/gal levels, with buying interest fading once prices move above 15.50c/gal. Some EBOB crack selling on 26 Nov flipped to Q1’26 crack buying on 27 Nov, while 92 still saw selective support in spreads and Cal’27 crack buying even as Europe outpaced other regions.
Naphtha followed similar patterns to last week. There’s been ongoing strength in MOPJ driven by firm MOC buying and supportive E/W and box performance, including interest in Dec’25 and Q1’26 flat price. In Europe, stronger gasoline has provided some crack support to NWE naphtha, prompting gasnaph selling, while Jan’26 and Q1’26 have seen the most selling, which in turn has supported box structures. Deferred structure remains firm with Cal’27 NWE naphtha cracks bought near –$8.10/bbl, and spreads have attracted some buying alongside Brent support.
In NGLs, international propane strength has driven the market upwards. The prompt LST/FEI arb fell from -$161/mt to -$175/mt, while the prompt FEI spread rallied to $17/mt this week. The market is long C3 CP ahead of the settle, with the prompt contract up from $485 to $498/mt w/w. The European window has been strong w/w, with the Dec/Jan NWE spread up from $4.50 to $12/mt w/w. Finally, C4 ENT/C3 LST initially weakened this week but climbed on thin liquidity ahead of Thanksgiving.
