Front-month gasoil’s premium to the second month contract, or backwardation, widened to the most in three months as European inventories of the heating fuel remained below the five-year average.
February gasoil traded as much as $11.75 more than March today on the ICE Futures Europe exchange in London. That’s the biggest spread since Oct. 30. The difference was at $10.50 as of 12:08 p.m. local time. The market structure can signal rising demand or falling supplies in the near term.
“Stocks are very tight in all key regions,” Mike Wittner, head of oil-market research at Societe Generale SA in New York, said in a note today.
Gasoil supplies held in independent storage in Europe’s Amsterdam-Rotterdam-Antwerp region were below the five-year average this month, according to PJK International BV, a researcher based in the Netherlands. Inventories rose 9 percent to 2.4 million tons in the week to Jan. 24 and compares with the five-year average of 2.5 million, the data showed.