End of Day Oil Products Summary: Diesel Retreats

Diesel markets have steadied after the initial surge higher yesterday on the reports of the ban on Russian diesel and gasoline exports. While diesel markets remain supported by tightening supply and low inventories, prices have fallen on the week, with Gasoil Oct 23 down around $15/mt from Sep. 15.

• Gasoil OCT 23 down -3.5% at 972.25$/mt
• ULSD OCT 23 down -1.6% at 3.31$/gal
• Gasoil OCT 23-NOV 23 down -3.5$/mt at 31.75$/mt
• EU Gasoil-Brent down -1.7$/bbl at 32.81$/bbl
• Russia has enough diesel to meet domestic demand, according to a statement from Russia’s Deputy PM Alexander Novak. Total diesel volumes in Russia’s storage facilities run by refineries and oil producers have reached 2.95m mt. Gasoline inventories were at 1.9m tons as of Sept. 20
• Russia gasoline/diesel ban is likely to last 6-week according to Citi analysts. The bank said a prolonged ban of these fuels would not be in Russia’s interests and it could end up shutting in crude production.
• JP Morgan expects the ban to last a “couple of weeks, until harvest concludes in October.”
• According to industry consultant FGE, “Once domestic supplies are replenished, Russia will have to resume exports due to a lack of spare storage capacity.” At the latest, Russian diesel exports are expected to resume in two weeks, possibly earlier, FGE said.
• Russian wholesale gasoline and diesel prices are tumbling Friday after the ban on exports of the grades from the country. Prices for Russia's wholesale gasoline Ai-92 grade fell by 9.7% on the St. Petersburg International Mercantile Exchange (SPIMEX) on Friday. Diesel prices were down by 7.5%.
• Bloomberg vessel tracking has flagged clean tankers bound for Russian diesel exporting ports going under anchorage because of yesterday’s ban.
• Extraction from the Groningen gas field in the northeastern Netherlands will come to a halt in October this year, according to government statement.
• IATA expects the air travel demand in the Asia-Pacific to recovery to 2019 levels next year, according to Willie Walsh, Director General of International Air Transport Association, speaking at the 2023 North Bund International Aviation Forum in Shanghai.
• Russia’s halt to exports of diesel and gasoline will “aggravate” an already tight oil market ahead of winter, according to the IEA as reported by the FT.