Net Weekly Decline in Diesel Cracks Despite Russia Refinery Outages

US diesel crack spreads have found some support today after seeing a steady decline all week amid concerns for weak demand and with a recovery in US refinery utilisation. The front month spread has fallen from $34.85/bbl on Mar.18 to a low of $29.6 yesterday.

• EIA data this week showed US distillates stocks increased on the week due to higher production and drop in exports. Weekly implied demand increased but the four week average remains below the previous five year seasonal range. Overall refinery utilisation was up to the highest since Jan. 12 at 87.8%.
• US distillate stocks are still 5.2% below the five year average. Data this week also showed European ARA Gasoil stocks 5.3% below normal and Singapore Middle Distillates inventories were 4.55% below.
• Concern for lower global oil product supplies due to refinery outages in Russian amid drone attacks have failed to support US and European crack spreads.
• Global supplies have been assisted by a rise in India diesel/gasoil export by 18.6% m/m to 2.399mn tons in February according to PPAC data.
• Some South Korean refiners are adding diesel spot supplies for April to the market after several sale tenders concluded in the past week. The extra supply could offset a possible decline in Chinese supply in April. China’s diesel exports rose 40k tons to 630k tons in Feb but were still down 70.8% on the year, official customs data showed.
• Gasoil APR 24 up 0.9% at 828$/mt
• ULSD APR 24 up 0.3% at 2.68$/gal
• Gasoil APR 24-MAY 24 up 2$/mt at 12.75$/mt
• Gasoil JUN 24-DEC 24 up 1.25$/mt at 28.25$/mt
• EU Gasoil-Brent up 0.1$/bbl at 23.56$/bbl
• US ULSD crack up 0.4$/bbl at 30.38$/bbl