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Diesel Cracks Lowest Since Mar 2022 on Weak Demand

OIL PRODUCTS

Nymex diesel crack and ICE gasoil crack spreads are both at the weakest since March 2022 after falling from a peak mid last month due to weak demand.

  • Concerns for further weakness in US demand and future growth in Europe and Asia are weighing on the spreads. Slowing US economic activity impacts fuel demand for trucking, manufacturing and farming.
  • An unexpected easing in China’s manufacturing activity in March and the risk of a US recession could impact future demand. EIA yesterday highlighted risks that economic and oil demand growth could be lower and that diesel demand is expected to contract this year compared to 2022.
  • Uncertainty remains over future Russian output despite robust supplies since the introduction of sanctions at the start of February.
    • US 321 crack down -0.7$/bbl at 35.05$/bbl
    • US gasoline crack down -1.7$/bbl at 37.09$/bbl
    • US ULSD crack up 0.1$/bbl at 30.73$/bbl
    • EU Gasoline-Brent down -2$/bbl at 20.28$/bbl
    • EU Gasoil-Brent down -0.1$/bbl at 16.97$/bbl

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