Oil Products End of Day Summary: Diesel Cracks down 10% During Week

Diesel cracks are on track to finish the week down around 10%, amid falling weekly demand and US stocks falling in line with seasonal trends. Downside remains limited by tightness in stocks globally.

• US ULSD crack down -1.3$/bbl at 39.54$/bbl
• US gasoline crack up 0$/bbl at 10.88$/bbl
• Overall weaker gasoline crack prices in the US are filtering through to the pump as the US average crosses the $3.49/gal mark this week. US gasoline demand remains lackluster on a seasonal basis.
• Spot gasoline prices in the USGC has fallen to their widest discount to futures in a decade amid a bifurcation in physical and paper markets, according to Bloomberg.
• Valero plans to run its 14 US refineries at 96.5% in Q4 it said yesterday, up from 95% in Q3 – a more bullish signal despite signs of economic malaise. The company noted significant exports to Latin America.
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• Transportation demand globally is not appearing as robust as would be expected given current levels of GDP growth, according to Citi global head of commodities Ed Morse in an interview with CNBC.“While we are up on the year for product demand in China, that is the effect of last year’s shut-ins of industrial and transportation activity,” Morse said. “We think China has peaked in diesel demand and is about to peak if it hasn’t already in gasoline demand.”
• Russia sent record volumes of seaborne fuel oil and vacuum gasoil to India las month, totalling 1.4mn tons, up from 0.6mn tons in August, LSEG data and Reuters calculation showed.
• QatarEnergy has offered additional gasoil cargoes for loading in 2024, according to Reuters sources. QatarEnergy is looking to sell at least 324k bbl of gasoil per month from December 2023 to March 2024
• BP’s Gelsenkirchen refinery in Germany is planning to restart a crude unit this weekend after it was halted in mid-September, a person familiar with the matter said, cited by Bloomberg.
• Northwest Europe and Med naphtha discounts to crude are expected to widen in November once planned refinery maintenance ends, according to Bloomberg citing a Kpler report.
• EU officials held an emergency meeting on Friday in which they discussed to diversify oil stocks and to create a buffer for diesel and gasoil, amid potential supply risks in case of an escalation in the conflict on the Middle East, one official told Reuters.