Diesel Markets Follow Weaker Crude with Focus on Demand

Diesel markets are today following the weakness in the crude market driven by market focus on risks to global oil demand growth despite tight supplies and low inventories. Weaker demand expectations in Europe and Asia will skew Gasoil margin risks to the downside according to FGE earlier this week.

• Front month US diesel cracks has fallen from about 45.5$/bbl on 2 Nov to 41.2$/bbl today but still holding above a low of around 38.4$/bbl in late October.
• Russia’s oil product exports are showing signs of recovery following export restrictions and seasonal maintenance, but diesel and gasoil exports last week declined 10% to the lowest since early October with some diesel restrictions still in place. Russia’s diesel exports from the Primorsk however increased slightly in October and are expected to continue climbing in November according to Bloomberg.
• Refined product exports from China fell to a four-month low in October as current quotas are nearing 90% and with no further batch expected to be announced this year. China gasoil/diesel exports are likely to fall back below 200kbpd through November and December according to Kpler while China’s refined oil production among state-owned refineries is expected to fall in November.
  • Gasoil NOV 23 down -0.9% at 849.25$/mt
  • ULSD DEC 23 down -0.7% at 2.82$/gal
  • Gasoil NOV 23-DEC 23 up 2.25$/mt at 36$/mt
  • Gasoil DEC 23-DEC 24 down -5.5$/mt at 59$/mt
  • EU Gasoil-Brent down -0.5$/bbl at 26.03$/bbl
  • US ULSD crack down 0$/bbl at 41.28$/bbl