Diesel Markets Follow Crude Recovery Higher

Diesel futures and crack spreads are recovering ground following the upward move in crude futures.

• Crude rallied with a weaker US dollar following the release of the US payrolls data. The data showed increased labour supply and softer overall wage growth resulting in a small drop in rate hike pricing for the March FOMC.
• European and US diesel markets are also supported by a drop in shipments of diesel from Asia to Europe in Feb which is expected to continue into March due to recovering domestic demand in China.
• The trend lower over the last week was driven by demand driven weakness amid mild winter weather, stronger than expected Russian product output and recovering inventories levels.
• Data this week showed European ARA Gasoil stocks 5.8% above the five year average, US distillate stocks now just 8.3% below normal and Singapore Middle Distillates inventories 20.2% below average.
  • Brent MAY 23 up 0.7% at 82.18$/bbl
  • WTI APR 23 up 0.7% at 76.24$/bbl
  • Gasoil APR 23 up 0.3% at 803.25$/mt
  • US gasoline crack down -0.1$/bbl at 33.52$/bbl
  • US ULSD crack up 2.2$/bbl at 38.65$/bbl
  • EU Gasoline-Brent up 0.3$/bbl at 16.68$/bbl
  • EU Gasoil-Brent up 1.8$/bbl at 23.55$/bbl