Refinery demand is way down YoY, lots of near-term raw crude supply on the market sloshing around - physical traders are storing crude in tankers and barges and not delivering it short term until the extreme contango corrects. Platt's and Schork have detailed the situation pretty well.
Thanks for the quick reply. I know about the contango (although the crude spreads made a nice move up on the close to settle somewhere around -260) but that doesnt explain the phenomenon of the cracks. And the fact that refinery demand is slowly droppping YOY doesnt account for the sudden (as of about 2-3 weeks ago) thinness of the cracks. As a crack scalper this situation is making these markets impossible to trade. I've moved to the spreads to get away from this front month crude. Hopefully it will correct when the contract rolls over. What do you think?
I think the cracks will pick up again for the summer driving season - April-ish. The HO crack is pretty much done for the winter by this point in time, look at the HDD and Nat Gas roll. I like the ICE GasOil Crack personally. Great fun.
HDD? The Nat Gas spread looks like its consolidating. You think the roll is gonna knock it further negative? I've never traded the ICE GASOIL crack (I use regular TT not pro so I'm not signed up for the ICE). Is it still scalpable? How much volume trades a day? Thanks for your help!