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Global Diesel Shortage Eases: Reuters

OIL PRODUCTS

The worldwide shortage of diesel and other distillate fuels has begun easing amid accumulating stocks, according to Reuters analyst John Kemp.

  • This build follows exceptionally high refinery margins and a slowdown in manufacturing and construction activity which softens diesel demand.
  • Heating demand for diesel into the winter is expected to soften due to El Nino conditions in the Pacific creating a mild US winter, while Europe is forecast to have above-average temperatures over winter.
  • However, cracks remain elevated because inventories remain low by historic standards. If manufacturing and construction was to accelerate, perhaps due to falling interest rates, this could squeeze the distillate market.
  • US ULSD crack down -0.6$/bbl at 37.27$/bbl
  • EU Gasoil-Brent down -0.4$/bbl at 23.72$/bbl

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