Diesel Cracks Softer and Gasoline Steady After China Data

Diesel crack are slightly softer and gasoline crack spreads are holding steady after China data showed record refinery runs in September but a drop in China gasoline and diesel exports on the month.

• The US front month gasoline crack has been holding between 7.3$/bbl and 10.7$/bbl after trending lower in the previous seven weeks from a high of around 40.7$/bbl in mid August due to weak demand. Diesel cracks have seen some support in the last week amid Middle East concerns while supplies remain tight during the current refinery maintenance season and global inventories are still below normal.
• Strong China refinery runs were driven by new export quota releases early September, strong export margins for diesel as well as solid domestic demand with firm travel figures during China’s Golden Week. Domestic demand was forecast to dip after the Golden Week holiday at the start of the month.
• Refiners could be slowing exports to conserve their quotas according to OilChem with a fourth batch of oil product export quotas looking unlikely.
  • EU Gasoil-Brent down -1.2$/bbl at 27.59$/bbl
  • US ULSD crack down -0.9$/bbl at 44.58$/bbl
  • EU Gasoline-Brent up 0.1$/bbl at 4.28$/bbl
  • US gasoline crack down -0.2$/bbl at 8.7$/bbl