Oil Products End of Day Summary: Diesel Climbs

Diesel crack spreads have seen an upward trajectory, climbing to closing levels unseen since Sep. 29 and rising around $7.6/bbl on the week. Supporting the diesel complex is ongoing tight supply concerns ahead of winter and a wider geopolitical risk premium across the oil complex.

• US ULSD crack up 2.5$/bbl at 46.96$/bbl.
• ULSD NOV 23 up 5.3% at 3.21$/gal
• Meanwhile, weakness in the gasoline complex is pushing cracks to their lowest level since Dec. 2022. Despite a draw in stocks and rising demand in the EIA data, gasoline demand remains tepid.
• US gasoline crack down -0.9$/bbl at 7.22$/bbl
• US gasoline, diesel and jet fuel demand has or is about to reach its peak according to US refiner Phillips 66 and refineries are expected to change output slates in response.
• Phillips 66 Reported an operational disruption at the 247k b/d Sweeny Refinery in Texas, according to the Wall Street Journal.
• China’s Sinopec has applied to the government to swap some marine fuel export quota to export more distillates and gasoline, according to Reuters sources.
• Run rates at China’s state-owned refineries fell to 80.3% capacity in the week to Oct. 12, according to OilChem.
• China oil products exports fell 8% m/m to 5.44 million tons in September after hitting a six-month high in August, according to customs data .
• Russian offline refining capacity is expected to fall 22% in October from September to 4 million tons according to sources and Reuters calculations.
• Russian oil product exports fell in September by 2.5% m/m to 9.456mn tons according to Reuters sources and calculations.
• Formosa Petrochemical Corp. is considering reducing overall refinery processing rates by 5% due to weak gasoline margins according to Bloomberg citing spokesperson Lin Keh Yen.
• OPEC+ countries pushed out higher oil product supplies in September, at the same time as they have been curtailing crude supplies according to Vortexa.
• Gazprom’s refining was not affected by the recent ban on fuel exports in Russia, with volumes in 2023 expected to be similar to last year, according to Interfax citing Gazprom CEO Alexander Dyukov.