DIESEL: Diesel Crack Drfit Lower After Support Last Week

Diesel crack spreads are drifting lower today after finding some support last week from rising implied US demand, low US and EU stocks and a fall back in underlying crude levels. European demand still looks tepid amid weak Eurozone manufacturing data.

• The prompt Gasoil spread is holding a slight contango of -$1.5/mt suggesting ample near term supplies while the Dec24-Dec25 spread has been narrowing throughout July from a high of just over $40/mt to $21.75/mt.
• Data last week showed European ARA Gasoil stocks falling to 10.6% below the five year average, while US distillate stocks are 8.5% below normal, but Singapore Middle Distillates inventories are up to 10.7% above normal.
• U.S. four week implied distillates demand rose in week to July 19 to just 0.3% below the previous five year average although remains below levels seen during late May and June, EIA showed.
• US diesel export loadings to Europe surged to record highs in July as the trade arbitrage for USGC diesel to Europe remained robust, Platts said. US diesel is now around 38% of Europe’s total imports of 1.37mb/d.
• Chinese refiners and fuel suppliers are expecting to export 3.27mn tons of oil products in August according to OilChem – flat vs July, but with diesel up 18% m/m to 590k tons.
  • Gasoil AUG 24 up 0.6% at 741.25$/mt
  • ULSD AUG 24 down 0.3% at 2.41$/gal
  • Gasoil AUG 24-SEP 24 up 0.5$/mt at -1.5$/mt
  • Gasoil DEC 24-DEC 25 down 0.5$/mt at 21.5$/mt
  • EU Gasoil-Brent down 0.1$/bbl at 18.88$/bbl
  • US ULSD crack down 0.4$/bbl at 25.26$/bbl