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Diesel Cracks Softening Despite Upside Pressures: Platts

OIL PRODUCTS

Diesel cracks have been softening globally despite a myriad of geopolitical events providing upside pressures, Platts analysts said in its Oil Market podcast.

  • Risks include disruption in the Red Sea, Russia refineries strikes, and supply concerns in Europe.
  • Europe has been able to cover some losses in diesel flows via the Red Sea by boosting its imports from the US. These volumes have been freed up by further Russian flows to Brazil, allowing new flows to rebalance the market.
  • 400k b/d of diesel came from the US to Europe, the highest since July 2017.
  • Consequently, there remains little concern about prompt coverage, Platts said.
  • However, due to Red Sea disruption there had been an inter-market widening of cracks between Europe and Singapore, expected to continue in the near term.
  • On the demand side, Warmer weather, contracting manufacturing and low overall growth are not supportive factors. Platts estimates that diesel demand in Europe has already peaked.
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Diesel cracks have been softening globally despite a myriad of geopolitical events providing upside pressures, Platts analysts said in its Oil Market podcast.

  • Risks include disruption in the Red Sea, Russia refineries strikes, and supply concerns in Europe.
  • Europe has been able to cover some losses in diesel flows via the Red Sea by boosting its imports from the US. These volumes have been freed up by further Russian flows to Brazil, allowing new flows to rebalance the market.
  • 400k b/d of diesel came from the US to Europe, the highest since July 2017.
  • Consequently, there remains little concern about prompt coverage, Platts said.
  • However, due to Red Sea disruption there had been an inter-market widening of cracks between Europe and Singapore, expected to continue in the near term.
  • On the demand side, Warmer weather, contracting manufacturing and low overall growth are not supportive factors. Platts estimates that diesel demand in Europe has already peaked.