Diesel Markets Heading for Weekly Gain after Soft End to March

US Diesel cracks have seen a recovery this week up from 25.75$/bbl to 29.2$/bbl amid ongoing Russia refining disruption and a pause in the recovery in US utilisation rates. Demand is weak but there are some indications that the fuel could see increased demand from the manufacturing sector.

• Russian refinery outages amid drone attacks and maintenance have raised concern for lower global oil product supplies. Around 14% of Russian capacity is now estimated offline according to Reuters but Minister Nikolai Shulginov said on Wednesday all refineries would be fixed by June, without providing further details.
• EIA data this week showed US distillates stocks fell as implied demand continues to disappoint and exports edged higher. Four week implied demand fell back below the previous five year seasonal range.
• US distillate stocks were down to 6.4% below the five year average. Data however also shows European ARA Gasoil stocks just 2.9% below normal and Singapore Middle Distillates inventories 2.55% below after small increases this week.
• Europe has been able to cover some losses in diesel flows via the Red Sea by boosting its imports from the US to the highest since July 2017.
• The prompt Gasoil time spread has also seen some support this week after falling from a high of 36$/mt in February back to 9$/mt at the end of March. The Jun24-Dec24 spread has also risen to maintain well above levels seen at the start of the year.
  • Gasoil APR 24 up 1.6% at 865.25$/mt
  • ULSD MAY 24 up 0.6% at 2.76$/gal
  • Gasoil APR 24-MAY 24 up 0.75$/mt at 12.25$/mt
  • Gasoil JUN 24-DEC 24 up 3.25$/mt at 32$/mt
  • EU Gasoil-Brent up 0.3$/bbl at 22.37$/bbl
  • US ULSD crack up 0.2$/bbl at 29.18$/bbl