Europe’s Diesel Stockpiles May Face Fresh Draws: Kpler

Stockpiles of diesel in Europe may face a fresh round of draws as transatlantic flows lose momentum, according to Kpler.

• This slowdown adds to low East-West volumes due to start-up problems at new Middle East refineries, Kpler said in a report.
• Scarcity of remaining Chinese export quotas will also weigh on diesel flows West, with Chinese refineries already using over 90% of their current export quotas, according to Bloomberg. China is waiting on its third batch of quotas, but their release has yet to be announced.
• Diesel crack spreads and European Gasoil time spreads are both trading higher this week with support from low inventories. The Gasoil Dec23-Dec24 spread is back up to 86.5$/mt but still below the peak over 100$/mt seen on 10 Aug.
  • Gasoil SEP 23 up 0.6% at 906.25$/mt
  • ULSD SEP 23 up 0.3% at 3.1$/gal
  • Gasoil SEP 23-OCT 23 up 1.25$/mt at 14.5$/mt
  • Gasoil DEC 23-DEC 24 up 7.25$/mt at 85.75$/mt
  • EU Gasoil-Brent up 0.7$/bbl at 36$/bbl
  • US ULSD crack up 0.3$/bbl at 50.3$/bbl