quote: France, Germany and Italy use both CSE (case #2) and EO (case #3) storage. The mix of the release will be key to assess market impact. My take is that they started with EO storage, and thus barrels physically already at the refinery have been freed for release. This is how you frontload the release in the first 20 days, as this is the most readily available SPR which is mobilizable on short notice. Those barrels were most likely hedged by the refinery hedging desk using short ICE Gasoil future positions - charging the negative carry plus financing to the governement on each roll, but that is story for another day. Those hedges had to be lifted, hence the brisk future buying activity on front ICE Gasoil futures after the announcement. That also means diesel released deep inland Germany and France, far, far away from ports - and that is deliberate. | You are going to hear so many bad takes about how the European SPR functions, that I'd like to preempt. There are three distinct SPR contractual arrangements : 1/ Some European gov't own the fuel directly 2/ Some European countries operate a Central Stockholding Entity, a public company, that owns the fuel and may own or rent tankage space. 3/ Economic Operators (refineries and fuel distributors) have a service agreement with their local European governement to stockpile fuel on the government's behalf and supply both the fuel and the tankage. Quite different consequence for the market depending which one gets released. Government typically don't hedge SPRs inventories. Refineries do hedge. I'm expecting a lot of swaps. One barrel goes out tomorrow, 1.2 barrel must come back in 6 months. https://t.co/8lhqeO4W9n