Diesel Cracks Steady After Decline Since Mid Jan

The European diesel crack spreads is holding relatively unchanged on the week despite falling to the lowest since March 2022 in within day trading yesterday. Rising stocks levels, steady supplies and mild weather have all combined to push the cracks lower since mid Jan.

• Data released this week showed European ARA Gasoil stocks up to a two year high and holding above the five year average despite the EU sanctions on Russian product implemented on 5 Feb. European supplies have been boosted in recent months by supplies from Middle East, US, and China.
• “European refiners are keeping utilization rates high to replenish stocks, with an added element of lower-than-normal outages - which has helped regional diesel supply,” Janiv Shah at Rystad Energy said earlier this week.
• “With Indian runs beyond max. nameplate capacity and Chinese runs forecast to extend, diesel exports from Asia are flowing into Europe, further helping supply”.
• US distillate stocks are 12.2% below normal and Singapore Middle Distillates inventories are 26.5% below average.
  • US gasoline crack down -1.5$/bbl at 31.77$/bbl
  • US ULSD crack up 0.1$/bbl at 38.08$/bbl
  • EU Gasoline-Brent down -0.8$/bbl at 11.21$/bbl
  • EU Gasoil-Brent up 0.3$/bbl at 23.25$/bbl