Diesel Spreads Pull Back on Declining Refinery Outages

Diesel spreads are extending a pull back seen yesterday with the restart of refineries in Europe following recent outages including at Shell’s Pernis refinery, TotalEnergies Gonfreville and Shell’s Godorf and despite ongoing concern for global demand.

• The Gasoil-Brent front month spread is down from the peak of 21.48$/bbl on 16 June while the Gasoil Jul-Aug spread is pulling back from the peak of 19.75$/mt yesterday. Both spreads are still much higher that levels seen at the start of June.
• Shell’s Pernis refinery has restarted the CDU after a leak with VDUs expected to restart this week and TotalEnergies Gonfreville refinery is restarting an unspecified unit following an outage last week.
• Wider market support comes from strong demand from India while China diesel exports have fallen from a peak earlier this year but Russian refinery runs are recovering after a dip lower during May due to maintenance.
• Falling Rhine river levels are also starting to restrict trade and increasing transportation costs ahead of the typically lowest river levels in the August-November period.
  • Gasoil JUL 23 down -0.8% at 725.5$/mt
  • Gasoil JUL 23-AUG 23 down -2.25$/mt at 14.75$/mt
  • Gasoil DEC 23-DEC 24 down -1.5$/mt at 24.25$/mt
  • EU Gasoil-Brent down -1$/bbl at 18.74$/bbl
  • US ULSD crack down -1$/bbl at 33.41$/bbl