European Market to Remain Volatile: Argus

A mild winter will create a calm start to 2024 for European diesel markets, but ageing refinery capacity in the region and the risk of unplanned outages could keep markets volatile, according to Argus.

• Diesel supply is likely to be healthy in January, the month with lowest consumption levels.
• However, if demand recovers later in 2024, margins will become sensitive.
• The marginal supply will need to be imported as Europe’s refineries are already maximising diesel output and there is scarce spare capacity.
• Large scale refinery products coming online outside of the continent may alleviate some supply concerns.
• New supply additions include the 650k b/d Dangote refinery in Nigeria, Oman’s 239k b/d Duqm refinery, Mexico’s 230k b/d Dos Bocas, and China’s 400k b/d Yulong refinery.