Diesel Markets Rally On Near Zero Russia Exports in Oct

Diesel cracks surge higher with data suggesting near zero diesel export from Russian in October. The spreads were already recovering from mid week lows with support from the low inventories and with a boost to demand as supply is squeezed by the Russia’s export ban.

• Russia diesel exports from key western ports are expected to fall to almost zero in October according to Bloomberg after the government ban on overseas fuel exports due to surging domestic prices.
• Despite builds this week, data still shows US distillate stocks 13% below the five year average, European ARA Gasoil stocks 18.1% below and Singapore Middle Distillates inventories 18.2% below average.
• The US crack spread is up from a low of 41.26$/bbl on 27 Sep to 47.8$/bbl. Gasoil backwardation is also strengthening with the prompt spread up at 34.5$/mt and Dec23-Dec24 at 128$/mt.
  • Gasoil OCT 23 up 1.6% at 1011.75$/mt
  • ULSD NOV 23 up 2.6% at 3.35$/gal
  • Gasoil OCT 23-NOV 23 up 2$/mt at 34.5$/mt
  • Gasoil DEC 23-DEC 24 up 4.5$/mt at 128.25$/mt
  • EU Gasoil-Brent up 2$/bbl at 35.16$/bbl
  • US ULSD crack up 1.7$/bbl at 47.87$/bbl