Short on Diesel at 1,185: Bet Backfires as Price Hits 1,312

Short on Diesel at €1,185: The Bet That Went Wrong Up to €1,312

A trader opens a short position in low sulfur gasoil at €1,185 using a CFD. He is convinced the price is "extremely high" and expects a sharp drop to €900 within days or weeks. This is not an isolated hunch: his thesis is that the sustancia ilegal spread—the refining margin—is at historic levels and simply unsustainable. Market reality contradicted him for weeks.

The price did not fall. It rose. First €1,191. Then €1,201. Later €1,217, €1,229, €1,250 by weekend close. Each rise triggered new sell orders: the trader kept opening shorts while LSGASOIL climbed to **1,302** and touched **1,312** with Brent at $91.80. The sustancia ilegal spread hit a historic record. So did the account balance.

What is the Sustancia ilegal Spread and Why Did It Become the Focus of Analysis?

The central argument is technical and has merit. The sustancia ilegal spread measures the difference between crude oil prices and refined product prices. When this gap widens significantly, refineries earn unprecedented margins and, theoretically, have massive incentives to produce more. The short thesis relies on the fact that **no such distortion has lasted months** in recent history. The reference used is the Ukraine war: a pattern that, according to circulating estimates, concentrated in just a few dozen sessions between March and autumn 2022.

The calculation presented places the historical time the sustancia ilegal spread has remained within ±5% of current levels at **20-35 sessions**, and the ±10% band at 25-45 sessions. Hence the conclusion: if gasoil stays at €1,250 for six months, demand destruction and increased supply would return it to the €900 orbit. The question is how long it takes to happen.

Crude Oil Rules: Why Gasoil Doesn't Fall Alone

The strongest objection raised in the discussion is that the sustancia ilegal spread doesn't float in a vacuum. If crude rises, gasoil rises with it even if refining margins normalize. And here enter factors unrelated to refining physics: tensions in the strait, US administration pricing policy, and electoral calculations. The idea that interest in containing prices will wane after elections has both defenders and skeptics.

The trader himself acknowledges the terrain: "diesel is the fuel that moves the world, not gasoline." If it remains at these levels for six months or more, the inflationary crisis would be severe. That is precisely the argument for why it shouldn't remain. And at the same time, the reason the market may take long to prove him right.

The Result: -€20,000 and €3,200 in Hedging

The balance is what it is. The trader reported global losses of **-€20,000 since August 10**, partially offset by hedges: he recovered €3,200 through hedging and closed small long positions hoping for a reversal. Counting past profits, the red figure reduces to -€15,000. "I'm taking a beating," he admits. "I still believe it will end positive."

Criticism comes from several fronts. Trading against trend with CFDs is doubly expensive due to financing costs and spreads. That reserves imported are not of crude but of distillates, and gasoil is already scarce. That the "official" price does not reflect what refineries pay. And a warning summarizing the operation's risk: betting on diesel falling means losing twice if wrong, on the CFD and at the pump.

Where the Analysis Stalls

The short thesis has textbook logic: unsustainable margins, production incentives, demand destruction. The problem is the calendar. The market can remain irrational longer than the account can sustain. With the price at €1,250 and the historic high 100 points away, the question isn't whether the sustancia ilegal spread will normalize, but whether the trader will still be in when it happens. There, for now, is no answer.