Possible good news for scrubber manufacturers as ICE Gasoil is now in contango whilst fuel oil is backwardated. The spread is now widening, but how far can it go ?
The max spread on the above chart is $149. This is still lower than it was a year ago. However, our risk management department pointed out that the gasoil crack spread is currently low at $4.36, but have been as high as $19 over the past year, additionally, the fuel oil crack spread is currently at -$6.48, but has been as low as -$28 over the past year. This means that there is plenty of room for the crack spreads to increase, which significantly increase the spread shown on the chart above.