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Diesel Cracks Fall on Lower Demand Expectations

OIL PRODUCTS

Diesel cracks lead refining margins lower after softer EIA demand data yesterday, due to falling gas prices and with weak demand feeding lower crude markets. Gasoline cracks remain largely unchanged after falling yesterday.

  • The last month had seen much stronger diesel cracks than gasoline due to low supplies and resilient demand. The European energy crisis has increased the potential for fuel switching from gas to diesel, but EU gas prices have seen a significant correction in recent days.
  • Global supplies could be impacted as Russia faces potential difficulties in finding buyers to redirect remaining European supplies before the oil product ban comes into effect on Feb 5 next year.
    • Brent NOV 22 down -2.1% at 93.6$/bbl
    • WTI OCT 22 down -2.2% at 87.59$/bbl
    • US 321 crack down -1.4$/bbl at 28.25$/bbl
    • US gasoline crack up 0.7$/bbl at 13.28$/bbl
    • US ULSD crack down -5.5$/bbl at 58.26$/bbl

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