Diesel Markets Extends Gains Amid Tight Supplies

Diesel markets extend the trend higher which has held since the start of July amid low inventories and refinery outages ahead of the winter heating season. The front month US diesel crack is up from a low around 46$/bbl last week to over 53$/bbl today week while the prompt Gasoil time spread has risen from below 12$/mt yesterday up to over 16$/mt.

• An outage at TotalEnergies Port Arthur refinery is adding to the price support today.
• Data this week showed US distillate stocks about 16% below the five year average and European ARA Gasoil stocks are 13.6% below. Singapore Middle Distillates inventories are still 15.6% below average despite a strong increase in data this week.
• Europe’s diesel and gasoil arrivals in the EU and UK are on course for a five month low according to Kpler. Imports are down 19% from July’s total daily average and is the smallest amount since the lowest since October 2017 seen in March.
• China diesel exports are expected at ~1.1mn tons in September according to OilChem, up from 610k tons in August.
• Russia’s exports of refined products are set for a 15-month low, amid strong domestic road fuel demand and some products pricing above the G7 cap. The government has recommended producers to redirect gasoline and diesel supplies to the domestic market.
  • Gasoil SEP 23 up 2% at 934.75$/mt
  • ULSD SEP 23 up 1.5% at 3.2$/gal
  • Gasoil SEP 23-OCT 23 up 1.25$/mt at 16.5$/mt
  • Gasoil DEC 23-DEC 24 up 6.25$/mt at 92.75$/mt
  • EU Gasoil-Brent up 1$/bbl at 38.86$/bbl
  • US ULSD crack up 1.1$/bbl at 53.25$/bbl