Diesel Crack Spreads Regaining Ground

Diesel crack spreads are regaining some ground today, but the European spread is still below the highs of around 28.5$/bbl from earlier this month. Diesel cracks are finding support due to US and Asian refinery maintenance and with the ongoing upside risk of Russia supply disruption despite robust flows so far this month since the implementation of sanctions.

• Some analysts expect refinery margins to come under pressure later this year due to a slowing economy, new refinery capacity in US, the Mideast Gulf, Asia-Pacific and Africa and with the return of units from maintenance.
• PKN Orlen expects demand and margins for refined products to weaken falling to around 11$/bbl later in 2023 from the current level of around 19$/bbl. PKN's refinery utilisation was very strong at 98% in the October-December 2022.
• The EIA STEO report earlier this month forecast lower gasoline and diesel crack spreads prices in 2023 than in 2022 although they are expected to remain high compared with pre-pandemic prices.
  • US 321 crack up 1.2$/bbl at 35.86$/bbl
  • US gasoline crack up 0.6$/bbl at 32.72$/bbl
  • US ULSD crack up 2.4$/bbl at 42.16$/bbl
  • EU Gasoline-Brent up 0.5$/bbl at 12.49$/bbl
  • EU Gasoil-Brent up 2.2$/bbl at 27.06$/bbl