Oil Products End of Day Summary: Diesel Cracks Surge

Diesel cracks surge higher with data suggesting near zero diesel export from Russian in October. The spreads were already recovering from mid-week lows with support from the low inventories and with a boost to demand as supply is squeezed by the Russia’s export ban. Today’s rally will see diesel cracks be higher on the week.

• US ULSD crack up 1.8$/bbl at 47.92$/bbl
• US gasoline crack down -2.1$/bbl at 10.08$/bbl
• Russia plans to reduce diesel exports from its key western ports to almost zero in October after the government banned overseas exports to combat surging domestic prices.
• Russia may introduce quotas on fuel exports if the ban does not succeed in bringing down prices according to Deputy Minister Alexander Novak. Russian diesel exports had already begun slowing on a month to date basis ahead of the export ban September 21 due to maintenance on the 430kbd Ryazan refinery and the 200kbd Syzran refinery with the largest reduction coming from Baltic ports.
• Europe has largely filled its diesel import needs with supplies from East of Suez suppliers after the Russian fuel import ban was implemented Feb 5 according to Vortexa figures.
• Gasoline cracks continue to trend lower on weak demand after the end of the peak summer season although US pump prices remain high due to the rising prices of the wider oil market.
• The US gasoline front month crack spread is down from about 26.5$/mt on 14 Sep to 11.2$/mt amid low demand after the end of the summer driving season. EIA data showed gasoline four-week average demand falling again this week and still near the five year range lows.
• California Governor Gavin Newsom has directed the state’s Air Resources Board to allow the typically cheaper winter-blend gasoline early as retail prices rise above 6$/gal.
• ExxonMobil will halt a petchem unit at its Gravenchon refinery France from Saturday based on a resident alert. There are no further details at present.
• India’s BPCL plans to shut a 150kpd CDU at its Mumbai refinery from 1 October for a one-month maintenance, a spokesman said.
• October air travel and implied jet fuel demand is expected to be at similar levels to September, according to BNEF, in line with seasonal trends and an Autumn lull.