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With the looming physical tightness of ULSD in Europe, refiners in the wider area are already starting to look at some creative refining to try and capitalize on the attractive economics. The upcoming length in off-spec diesel might just offer some respite to Europe after it goes through the process of phasing out imports from Russia, once the embargo kicks in.
The Netherlands’ gas transmission system operator Gasunie has advised the Dutch government to keep Groningen, the EU’s largest gas field, open at minimal production levels until further notice instead of closing it down in October as currently planned. This is to help mitigate security of supply risks as the country’s additional LNG import capacities have not yet replaced all the lost Russian pipeline supplies.
Food inflation has taken hold across the world. In places like America and Europe, food prices were up by more than 10% y/y in December. Nonetheless, the situation seems to be improving. Wheat prices have eased considerably off the highs seen in the initial months following Russia's invasion. Food inflation in m/m terms is already showing signs of a slowdown. The grain deal, which came into effect last August, is clearly having an impact. Ukraine managed to ship 4.75 Mt in total seaborne wheat tonnage through the final five months of the year.